A Note on Regulating a Multiproduct Monopolist.

In a 1995 paper, Kim and Jung designed an optimal tax scheme for regulating a multiproduct monopolist in a situation of doubly asymmetric information. This paper points out the similarity of their scheme to the incremental surplus subsidy scheme of Sappington and Sibley (1988), examines the possibility of the abusive expenditures by the regulated firm, as discussed in Blackmon (1992), and provides one potential remedy for eliminating abuse. Copyright 1997 by Kluwer Academic Publishers