University of St.Gallen
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Innovation in the Swiss mail sector: deregulation versus liberalization

abstract In this paper we discuss an incumbent postal operator’s incentives to invest in an innovation in the face of upcoming liberalization and deregulation of the letter market. Our contribution is a short description of recent innovations in the Swiss mail market and their interpretation in light of an illuminative yet tractable model. Following the literature, we distinguish between product and process innovation. We characterize
competitive pressure by a reduction in the incumbent’s market share and an increase of his/her perceived price elasticity of demand due to consumers’ switching to competitors. This may result in adverse incentives to invest in an innovation. Likewise, deregulation leads to increased entrepreneurial freedom on the operator’s side and possibly a lower burden of USO (universal service obligations), reflected in lower cost. This sustains incentives to invest in both product and process innovation.
   
type journal paper
   
keywords innovation, liberalization, deregulation, post, mail market
   
language English
kind of paper journal article
date of appearance 17-12-2007
journal International Journal of Regulation and Governance
volume of journal 7
number of issue 2
page(s) 147-156
review double-blind review
   
citation Jaag, C. (2007). Innovation in the Swiss mail sector: deregulation versus liberalization. International Journal of Regulation and Governance, 7(2), 147-156.