Abstract
This paper presents a model of entry and imperfect competition, which is inspired by the product differentiation literature and incorporates facts pertaining to the postal sector. There are two operators: incumbent and potential entrant. The entrant offers only one of the products (commercial mail) with a specific technology and delivers only to part of the addressees (located in low cost areas). Its degree of coverage is viewed as a quality attribute; it affects demand and hence market share. The incumbent faces a USO while the entrant is an unregulated profit maximizing firm. To illustrate the potential applications of our approach, we provide some numerical simulations of entry scenarios.
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Cremer, H., Grimaud, A., Florens, JP. et al. Entry and Competition in the Postal Market: Foundations for the Construction of Entry Scenarios*. Journal of Regulatory Economics 19, 107–121 (2001). https://doi.org/10.1023/A:1011106721301
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DOI: https://doi.org/10.1023/A:1011106721301