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Swiss Journal of Economics and Statistics

, Volume 144, Issue 1, pp 37–55 | Cite as

The Effect of Entry Regulation on Process Innovation in the Swiss Mail Industry

  • Helmut M. Dietl
  • Andreas Grütter
  • Martin Lutzenberger
  • Cátia Felisberto
  • Matthias Finger
Open Access
Article
  • 29 Downloads

Summary

We develop an industry specific model of price competition with product differentiation to analyze the effect of entry regulation on process innovation in the Swiss mail industry. We consider the four most prominent scenarios: Regulated monopoly, end-to-end competition, worksharing without bypass, and work-sharing with bypass. Based on model calibration with data from the Swiss letter market, we find that the incentives to invest in process innovations decrease with deregulation. However, even accounting for this fact, the efficiency gains of a partial liberalization, i.e. worksharing, ensure an increase in social welfare.

Keywords

end-to-end competition entry regulation mail industry process innovation work-sharing 

JEL-Classification

L51 L87 

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Copyright information

© Swiss Journal of Economics and Statistics 2008

Authors and Affiliations

  • Helmut M. Dietl
    • 1
  • Andreas Grütter
    • 1
  • Martin Lutzenberger
    • 1
  • Cátia Felisberto
    • 2
  • Matthias Finger
    • 2
  1. 1.Institute of Strategy and Business Economics, Services and Operations ManagementUniversity of ZurichZurichSwitzerland
  2. 2.College of Management and Technology, Management of Network IndustriesEPF LausanneLausanneSwitzerland

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