Privatizing roads : a new method for auctioning highways

摘要: This note argues that many of the problems have plagued highway privatization stem from combined effects special features business and type contracts - fixed term franchises typically been used. The presents a new mechanism, least present- value-of-revenue (LPVR) auction, corrects some shortcomings franchise. mechanism endogenously adjusts duration franchise to realization demand: lengthens if traffic grows more slowly than expected shortens it rapidly expected.