%0 Journal Article
%T Contract Renewal as an Incentive Device. An Application to the French Urban Public Transport Sector
%A Axel Gautier
%A Anne Yvrande-Billon
%J Review of Economics and Institutions
%D 2013
%I University of Perugia
%R 10.5202/rei.v4i1.88
%X In the French urban public transport industry, operations are often delegated and periodicallyput out for tender. Thus, operators¡¯ incentives to reduce costs come from both profitmaximization during the current contract and from the perspective of contract renewal. Weconstruct a dynamic incentive regulation model that captures these features and we show thatboth the level of cost-reducing effort and its repartition during the contracting period dependon the contract type (cost-plus, gross cost or net cost contract). We then estimate a costfrontier model for an eight-year panel of French bus companies (664 company-yearobservations) to test our predictions.
%K incentive regulation
%K urban public transport
%K stochastic frontier analysis
%K competition for contract
%K contract renewal
%U http://www.rei.unipg.it/rei/article/view/88