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Deregulation of letter markets and its impact on process and product innovation


Dietl, H; Grütter, Andreas; Lutzenberger, M (2008). Deregulation of letter markets and its impact on process and product innovation. Review of Network Economics, 7(2):231-246.

Abstract

Does the European model of end-to-end competition or the US model of worksharing provide stronger innovation incentives for incumbent postal operators? We answer this question based on a two stage model with price competition and product differentiation. We find that incentives for process innovation in the upstream activities are stronger under end-to-end competition. Incentives for process innovation in delivery are stronger under worksharing, assuming that the entrant's demand under worksharing is higher than the decline in the incumbent's demand. Regarding product innovation, incentives depend on the access price.

Abstract

Does the European model of end-to-end competition or the US model of worksharing provide stronger innovation incentives for incumbent postal operators? We answer this question based on a two stage model with price competition and product differentiation. We find that incentives for process innovation in the upstream activities are stronger under end-to-end competition. Incentives for process innovation in delivery are stronger under worksharing, assuming that the entrant's demand under worksharing is higher than the decline in the incumbent's demand. Regarding product innovation, incentives depend on the access price.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:25 June 2008
Deposited On:13 May 2009 12:23
Last Modified:06 Nov 2018 17:19
Publisher:Network Economics Consulting Group
ISSN:1446-9022
OA Status:Green

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