New PDF release: Postal and Delivery Services: Delivering on Competition

By Michael A. Crew, Paul R. Kleindorfer

ISBN-10: 1461349788

ISBN-13: 9781461349785

ISBN-10: 1461502330

ISBN-13: 9781461502333

Postal and supply companies: providing on Competition is an critical resource of knowledge and research at the present kingdom of the postal and supply quarter. It deals present perception into approach, legislation in addition to the economics of this zone. concerns addressed comprise overseas postal coverage, the common provider legal responsibility, legislation, pageant, access, the position of scale and scope economies, the character and function of fee and insist research in postal carrier, productiveness, interplay of legislations and economics, human assets, transition and reform issues.

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Additional info for Postal and Delivery Services: Delivering on Competition

Sample text

Segment 1 corresponds to a composite activity including collecting, sorting and transportation. This activity implies a constant marginal cost c,. Segment 2 is delivery with marginal cost of c2 . In addition, there is a fixed cost of F. 4 There are two types of clients and two goods. The nh clients of type h (households) consume good x which uses both segments. The marginal cost of x is thus given by c, + c2 • The nf clients of type f (firms) mayor may not use segment 1 of the operator's network.

One thing is very clear. Relative to alternatives previously discussed, the approach outlined here is more likely to enable the preservation of the USO. Moreover, the proposed Delivery Access Price (DAP) Rule at least partially eliminates subsidies that would otherwise promote inefficient entry and use of the incumbent PO's facilities for downstream access at rates that do not even cover marginal cost of such access. This would affect not only efficiency but the sustainability of the USO. The numerical results in the Appendix provide further insights on this issue.

A constraint imposing an upper limit on the weighted average of its prices. Throughout the section we consider price cap formulas under which the weights (of the different prices) are exogenous for the operator. z. The first order conditions of this problem are given by: (l7a) 15 Similar decentralization results for the telecommunications sector are obtained by Laffont and Tirole (1996) and Crew and Kleindorfer (1994). l. Comparing (6)- (7), the expressions determining the second-best solution, with (l7a)-(l7b), while making use of(4) and (5), we show that this is the case when 1 (18) Jl= 1+,1* where ,1* is the Lagrange multiplier of the second-best problem and ax = pnhxh(p;)+ nhxh(p;)+ nf J x; (p;)g (k )dk k (19) (20) For good Z we obtain exactly the same result as before: the appropriate weight is simply equal to the aggregate demand levels at the second-best solution.

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Postal and Delivery Services: Delivering on Competition by Michael A. Crew, Paul R. Kleindorfer


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