A NOTE ON REGULATING A MULTIPRODUCT MONOPOLIST

In a 1995 paper, Kim and Jung designed an optimal tax scheme for regul ating a multiproduct monopolist in a situation of doubly asymmetric in formation. This paper points out the similarity of their scheme to the incremental surplus subsidy scheme of Sappington and Sibley (1988), e xamines the possibility of the abusive expenditures by the regulated f irm, as discussed in Blackmon (1992), and provides one potential remed y for eliminating abuse.