Postal and Delivery Economics

This is may be the industry on which I devoted most of my attention since my arrival at IDEI. I was introduced to the specifics of the sector by Helmuth Cremer with whom I co-authored all my works on this topics.

One of the specificity of this industry is that market is highly concentrated: most of the mail volume is emitted by few clients like banks, telecom operators, ecc.
Those big clients use to sort and prepare their mail for the operator in exchange of a rebate. This is named "worksharing".
Even when considering an issue like "public service obligations", it is of crucial importance to take into account industrial mail as to be sure to propose policies that are compatible with the balance of the industry.

Along the last years, we have been studying this aspect at length.
We first exhibit socially optimum prices in a monopoly context and propose a regulatory mechanism as to decentralise this allocation. This first contribution was extended to allow the regulator to target households specifically. This is respectively:

  • "Optimal pricing and global price-cap in the postal sector"
  • "Pricing and worksharing discounts in the postal sector"

We then turn our attention to the issue of "access". A delivery network represents significant costs. Clearly, duplication would be a waste. Granting access to the delivery network thus appears to be the efficient thing to do. The proper way to do so is however still very much debated. This will indeed impact the nature of the competition on the postal market. It may also create difficulties if the universal service operator is compelled to offer uniform tariffs. Finally, it may affect the whole structure of prices in the industry. These points are addressed in the following contributions:

  • "Pricing and imperfect competition in the postal sector"
  • "Access and (non-)uniform pricing in the postal sector"
  • "Worksharing, pricing and competition in the postal sector"

Stepping back a moment from technical issues, we recently produced what can be considered as a synthesis of our previous research:

  • "Worksharing, Access and Bypass: The Structure of Prices in the Postal Sector"

Among other things, this paper stresses the challenges around the liberalization of the industry.

We also took some time to address the question of the empirical relevance of our theoretical models. This is:

  • "Worksharing: a Calibrated Model"

Coming back to the issue of optimal pricing, we finally studied the possible impact of more complex pricing schemes. This gave rise to:

  • "Nonlinear Pricing and Worksharing in the Postal Sector"

This is a problem we are still invastigating.