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  "documentTitle": "Rail industry cost and revenue sharing (2011)",
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      "text": "ORR/ATOC/Network Rail. Rail industry cost and revenue sharing.",
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      "text": "The existence of the option value would make it more difficult to secure VfM through implementing an outperformance-only Regional EBS during existing franchises.",
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      "text": "It is uncertain how train operators would price the option value if an outperformance-only Regional EBS mechanism were introduced through a franchise bidding competition. However, L.E.K. thinks it likely that bidders would price this conservatively.",
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      "text": "The main advantage of an outperformance-only EBS mechanism over a symmetrical mechanism is that bidders would not have to charge a risk premium to protect themselves against the potential downside risk.",
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      "text": "In summary, the relative attractiveness of an outperformance-only EBS mechanism and a symmetrical mechanism depends on how train operators price these two mechanisms, and this is uncertain.",
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      "text": "There are two significant disadvantages of an outperformance-only Regional EBS mechanism relative to a symmetrical mechanism: First, operators may ignore it if they expect under-performance; Second, it creates 'option value' which is hard to value.",
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      "text": "The relative attractiveness of an outperformance-only EBS mechanism and a symmetrical mechanism depends on how TOCs price these two mechanisms, and this is uncertain",
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