Brand, Product Differentiation and Postal Market Outcomes

  • Isabelle CarslakeEmail author
  • George Houpis
  • Ellie Monaghan
Part of the Topics in Regulatory Economics and Policy book series (TREP)


Letters markets were opened to full competition by 2011 in most EU countries. We can thus observe some market outcomes post liberalization: the broad picture suggests that customers have been somewhat sticky. In this paper, we use a differentiated Bertrand economic model—typically used for merger simulation—to assess possible factors that affect the development of competition in post. This model captures the apparent characteristics of different postal products markets based on evidence of current market outcomes and can assist policy makers in evaluating policies and assessing the strength of some determinants of market outcomes, such as product differentiation and possibly relative strength of the brand of the incumbent.



The views expressed in this paper are solely attributable to its authors and do not necessarily represent those of Frontier Economics. The authors thank Ankit Parasrampuria at Frontier Economics for his research support.


  1. Andersson, P., Bengtsson, S., & Johanna Eriksson, J. (2018). The Danish problem – Soon everybody’s? – An analysis of different effects of digitalization on postal services in Denmark and Sweden. In 26th conference on postal and delivery economics.Google Scholar
  2. Berry, S., & Haile, P. (2016). Identification in differentiated products markets. Annual Review of Economics, 8, 27–52.CrossRefGoogle Scholar
  3. Burns, P., Carslake, I., & Houpis, G. (2002). Brand loyalty and limited entry in postal markets. In M. Crew & P. Kleindorfer (Eds.), Postal and delivery services: Delivering on competition. Boston, MA: Kluwer Academic Publishers.Google Scholar
  4. Copenhagen Economics. (2018). EC main development in postal markets 2013–2016, preliminary findings. Retrieved from
  5. ERGP. (2014). Report on end-to-end competition and access in European postal markets. Retrieved from
  6. European Commission. (2015). Commission staff working document - Accompanying the document report from the Commission to the European Parliament and the Council on the application of the Postal Services Directive (Directive 97/67/EC as amended by Directive 2002/39/EC and Directive 2008/6/EC) {COM (2015) 568 final}. Google Scholar
  7. European Commission, Mr Raphaël Goulet, Head of Unit GROW.E.2, Public Interest Services. (2018). Evolution of user needs across postal markets and the future of the Universal Service, Copenhagen, 3 May 2018.Google Scholar
  8. EC Case No M.6992 HUTCHISON 3G UK/TELEFONICA IRELAND. Retrieved from
  9. EC Case No M.7018 - TELEFÓNICA DEUTSCHLAND/ E-PLUS. Retrieved from
  10. EC CASE M.7758-HUTCHISON 3G ITALY/WIND. Retrieved from
  11. Froeb, L., & Werden, G. (1994). The effects of mergers in differentiated products industries: Logit demand and merger policy. Journal of Law Economics and Organization, 10(2), 407–426.Google Scholar
  12. Hausman, J., Moresi, S., & Rainey, M. (2011). Unilateral effects of mergers with general linear demand. Economic Letters, 111(2), 119–121.CrossRefGoogle Scholar
  13. Nevo, A. (2000). Mergers with differentiated products: The case of the ready-to-eat cereal industry. The RAND Journal of Economics, 31(3), 395–421.CrossRefGoogle Scholar
  14. Ofcom. (2017, November 23). Annual monitoring update on the postal market, Financial Year 2016–17. Retrieved from
  15. Shapiro, C., & Farrell, J. (2010). Antitrust evaluation of horizontal mergers: An economic alternative to market definition. The B.E. Journal of Theoretical Economics, 10(1), 35.Google Scholar

Copyright information

© Springer Nature Switzerland AG 2018

Authors and Affiliations

  • Isabelle Carslake
    • 1
    Email author
  • George Houpis
    • 1
  • Ellie Monaghan
    • 1
  1. 1.Frontier EconomicsLondonUK

Personalised recommendations