Update 1.md

content/papers/1.md

@@ -12,7 +12,7 @@ summary: "This paper investigates the optimal allocation of common-pool resource
 
 ##### Abstract
 
-Rising competition in the commons poses risks of resource depletion and congestion. Conversely, consolidation by larger, longer-lived firms tends to internalize more of these externalities, but at the expense of higher markups. To navigate these competing concerns, this paper develops a model of common-pool industry dynamics and applies it to the 19th-century American whaling industry. The findings suggest that the industry over-harvested whales in the early periods, resulting in inefficient production later on. A monopoly would have partially mitigated these inefficiencies while restricting output more than a social planner would. The optimal Pigouvian tax that fully internalizes the shadow values of whaling could have achieved a socially efficient allocation.
+Rising competition in the commons poses risks of resource depletion and congestion. Conversely, concentration by larger, longer-lived firms tends to internalize more of these externalities, but at the expense of higher markups. To navigate these competing concerns, this paper develops a model of common-pool industry dynamics and applies it to the 19th-century American whaling industry. Compared to the social planner's first-best benchmark, the industry over-harvested whales in the early years, leading to under-harvesting later on. Perfect collusion would have partially mitigated these inefficiencies while restricting production more than a social planner would. The optimal Pigouvian tax that fully internalizes the shadow values of whaling could have achieved a socially efficient allocation.
 
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