Review of Industrial Organization (2006) 28:307–326 © Springer 2006
Access Pricing in the Postal Sector: Theory and
PHILIPPE DE DONDER
University of Toulouse (IDEI and CNRS-GREMAQ), 21 all ´ees de Brienne, 31000
Abstract. This paper studies a theoretical model aimed at assessing the optimal access
charges and retail prices in the postal sector. It takes explicitly into account three main
characteristics of the postal sector: the ability of entrants to bypass the incumbent’s deliv-
ery network; the imposition on the incumbent, but not on entrants of universal service
obligations; and the provision of access to both competitors and customers. The paper
ﬁrst develops analytical formulations of the optimal access charges and the incumbent’s
end-to-end retail price. It then presents calibrated results illustrating the impact on prices
and welfare of various scenarios.
Key words: Bypass, consumer direct access, displacement ratio, Ramsey prices, worksharing.
JEL Classiﬁcations: L51, L97
The liberalization of network industries, starting with airlines, telecommu-
nications and energy, has generated an extensive literature on mandatory
access to parts of an incumbent’s network.
Although all these sectors are
often regrouped under the heading of network industries, any mandatory
access policy should take into account the speciﬁc characteristics of each
of these sectors. The objective of this paper to develop an access pric-
ing model that takes explicitly into account the main characteristics of the
The postal sector exhibits a unique mix of characteristics relevant for
access pricing regulation. First, the bottleneck in this industry is the
See for instance Laffont and Tirole (2000), Armstrong (2001, 2002) and Armstrong
et al. (1996).