Postal market, natural monopoly, liberalization, La Poste, ACERP, market regulation, competition, postal services, price discrimination, consumer surplus
Reader
Abstract
Extract
of 3
Abstract
The transformation of La Poste into a public limited company in 2010 marked the beginning of the liberalization of the French postal market, challenging the natural monopoly position.
Extract
[...] The multiplication of participants on this market will not benefit consumers, as all firms must bear a high and prohibitive fixed cost. Despite this, the post office is regulated4 regulated by public authorities for different reasons: the first is related to the ambiguous link between monopoly and aggregate well-being. We know that a monopoly leads to inefficient price-setting methods, generating both deadweight losses, with higher prices and lower quantities than in a situation of pure and perfect competition, or even imperfect competition. [...]
[...] The French postal market: from historical monopoly to liberalization of the market The transformation of La Poste into a public limited company in 20101 was considered as a prelude to the privatization of the latter, but also to the opening of the postal market - mail distribution - to other actors2. Historically3, the postal market has long been considered a natural monopoly: indeed, the distribution of mail and postal correspondence required the establishment of costly infrastructures, the fixed cost of which cannot be borne by a private company. [...]
[...] The multiplication of tariffs - such as those of tracked letters for example - also ensures a second-degree discrimination, allowing the post office to continue to operate a transfer of surplus by targeted population, while reducing the average price per service. The opening of the postal market to competition, however, challenges the natural monopoly position - without necessarily shifting to a configuration of pure and perfect competition. In fact, the main characteristic of the postal market is the importance of fixed costs for creating the infrastructure for exploitation, sorting and distribution of mail. Source: ACERP, postal activities observatory. [...]
[...] The role of ACERP is to prevent the adverse effects of this situation, namely an expensive pricing, and a second-degree price discrimination that would operate a total transfer of surplus from the consumer to the.s operator.s on the postal market. Regulation plays a favorable role for both sides of the market: the guarantee of affordable tariffs for consumers increases their surplus, and the constant evolution of investments shows that the operators on the postal market see their activity as a positive profitability, which also contributes to their own surplus. The social surplus - a measure of well-being in microeconomics - being the sum of the two, we can conclude that regulation has positive effects overall. [...]
