Congress recently has passed the Postal Accountability and Enhancement Act, which leaves most elements of the current postal regulatory framework (postal monopoly, state owned enterprise) unaltered. Similar regulatory frameworks have been established in the U.S. and the European Community....

In this paper we analyze the incentive of the German postal service (Deutsche Post AG, DPAG) to increase quality in the light of the upcoming liberalization of the postal services market. Currently, there would be no incentive for DPAG to increase its quality if the market were not to be...