Consumers awareness and environmental policy in differentiated mixed oligopoly

In this paper, we show that the implications of consumer awareness on environmental policy in both mixed and private oligopolies under regulated entry and free entry. The emission taxes are charged when the market imperfection and consumer cognition of pollution are low, while the consumption externality is substantial. However, when the consumers' cognition of pollution damage is increasing and the consumers are willing to pay (WTP) less for the polluted good, the government should choose a lower emission tax.