In this paper, 3 contractual forms used in the competitive tendering of public transport services are compared. Conclusions drawn from this research are: 1) under the full cost contract the operator must make strictly positive profit in order to maintain quality; 2) with the net cost contract the desired level of quality can be achieved with a lower transfer to the operator if the revenue risk is not too high; and 3) incentive contracts with measured quality included as a variable must include risk compensation for imprecise performance measurements. It is argued that the predictions of the model explain some features of actual tendering contracts.

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  • Corporate Authors:

    University of Bath

    Claverton Down
    Bath, Avon  United Kingdom  BA2 7AY
  • Authors:
    • Muren, A
  • Publication Date: 2000-1


  • English

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Filing Info

  • Accession Number: 00791419
  • Record Type: Publication
  • Files: TRIS, ATRI
  • Created Date: Apr 20 2000 12:00AM