Engel, Eduardo M. R. A.; Fischer, Ronald D.; Galetovic, … - In: Journal of Political Economy 109 (2001) 5, pp. 993-1020
In this paper we show that fixed-term contracts, which are commonly used to franchise highways, do not allocate demand risk optimally. We characterize the optimal risk-sharing contract and show that it can be implemented with a fairly straightforward mechanisma least-present-value-of-revenue...