Center for Advanced Management




Prof. Paul R. Kleindorfer (University of Pennsylvania)


  • Datum: 19.06.2008
    17:00 - 18:30
    Raum 307, Schackstr. 4, 3. Stock

Service Quality, Price Caps and the USO in the Postal Sector

There has been considerable interest in service quality in regulated industries, following the rise of price-cap regulation (PCR). Previously, under public enterprise in Europe and cost-of-service or rate-of-return regulation (ROR) in the United States, service quality was less an issue, since the costs of higher quality were passed through to the customer in the regulatory regime. Under PCR, it was clear at an early stage that, for a regulated monopolist, there were incentives to reduce quality as one means of increasing profitability while satisfying the price cap. Thus, a number of modifications to the initial PCR regimes emerged to provide incentives for the regulated firm to maintain service quality at a level determined by the regulator. The mix of competition and PCR brings additional levels of complexity to the quality of service issue, both for regulators as well as for regulated firms. In the postal sector, there is the additional problem of determining the quality of service that should apply to USO products, and their interdependencies with competitive products. Although there is an extensive literature on service quality and competition both in industrial organization and in the postal sector there are several unanswered questions.