infonet-economy

In our contribution, we analyze whether the traditional pricing concept
(sender pays principle) remains dominant in competitive postal markets. We divide the competitive postal market into a processing and delivery part, where a postal operator faces two kinds of customers: senders in the former and receivers in the latter part of the market. Based on the contributions by Laffont, Rey and Tirole (1998), Rochet and Tirole (2003), Armstrong (2006), and Panzar (2006) we develop a theoretical model with consumers' platform choice between two operators competing in linear upstream and two-part downstream prices and being interconnected by a symmetric access regime to P.O. boxes. Thereby, we extend the analysis of a delivery flat rate by Felisberto et al. (2006) and Friedli et al. (2006) to a competitive environment and assess optimum pricing schemes in market equilibrium.