Abstract
As we argued in our earlier paper, the United Kingdom Post Office has a long and distinguished tradition of innovation going back to the reforms of Rowland Hill. On September 16, 1968, the Post Office introduced another major innovation, the two-tier pricing system. Peak-load pricing thus became universal in the Post Office. Without fanfare, in one stroke, peak-load pricing was applied completely to one industry. Despite the many exhortations for peak-load pricing in electricity, telephone, and other industries, in no other industry has peak-load pricing been so extensively applied as in the Post Office.1 While the practical experience of peak-load pricing gained by the Post Office has been considerable, the significance of the two-tier pricing systems has generally been missed in the literature of academic economics. The analysis provided by economists of the peak-load pricing problem in postal service has been limited to testimony by John Panzar (1984) and our recent paper with Marc Smith, (Crew, Kleindorfer, and Smith 1990, C-K-S).
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References
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Crew, M.A., Kleindorfer, P.R., de Meza, D. (1991). Peak-Load Pricing of Postal Service and Competition. In: Crew, M.A., Kleindorfer, P.R. (eds) Competition and Innovation in Postal Services. Topics in Regulatory Economics and Policy Series, vol 8. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-4818-5_3
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DOI: https://doi.org/10.1007/978-1-4757-4818-5_3
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