Discussion Papers

Frank Pieper

Preisbildungsmodelle und deren Anwendung im Briefdienst
Nr. 143 / Januar 1995
(no longer available)

Summary

In Germany, like in most other countries, a monoply for providing letter services is accorded to a postal administration. In a market structure like this it is assumed that market outcome do not correspond with welfare maximizing prices and quantities. To prevent DBP Postdienst from exploiting monopoly power, prices for letter services are regulated. The aim of this discussion paper is twofold: first, relevant pricing models should be identified and second, those models should be applied to the german letter service. The first part of the paper gives a brief outlook of the production of letter services. In the second part, different pricing modells are discussed. From a theoretical point of view Ramsey-pricing is the most convincing modell for setting prices for reserved letter services. The main criticism is that application requires a lot of empirical in-formation, which normally is not available. Other approaches presented in this paper are peak-load pricing, two-part tariffs, and "costoriented" pricing.

Based on empirical data from the United States, Ramsey-prices and "costoriented prices" are calculated and compared with the actual price structure of DBP Postdienst. The higher the share of non-attributable costs the more differ Ramsey-prices and cost-oriented prices. Due to the fact, that the calculations are based on a cost structure with a large share of common costs only the Ramsey-pricing model is reasonable for application to the letter service. Depending on the assumption of the level of marginal costs the actual prices of Briefpost and Infopost are close to the calculated Ramsey-prices. To confirm these results further investigations about the restrictive assumptions have to be carried out.

Only German language version available.

Discussion Paper is no longer available.

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