Environmental awareness and taxes to contamination in the presence of oligopolistic competition
DOI:
https://doi.org/10.29201/peipn.v17i34.87Keywords:
Environmental awareness, pollution tax, oligopolistic competition, disutility for pollutingAbstract
We develop an oligopolistic model in which two firms compete with a homogenous good, but consumers have different preferences for them. One good is produced by a polluting technology and the other is produced with nonpolluting technology. The host government set an optimal pollution tax to the polluting firm. The pollution tax is positive if the marginal pollution disutility and/or the level of environmental awareness are sufficiently large. The optimal pollution tax is zero if the marginal pollution disutility and/or the level of environmental awareness are sufficiently small.
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