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, yet it can lower markups and increase consumer welfare. Conversely, larger, longer-lived firms tend to internalize externalities but also restrict production and raise prices. 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 harvested more whales in early periods than it would have under a monopoly counterfactual. This overproduction led to a decline in whale stocks, subsequently reducing production and increasing prices in later periods. A social planner, on the other hand, would have balanced consumer and producer surpluses to maximize social welfare. A 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, yet it can lower markups and increase consumer welfare. Conversely, larger, longer-lived firms tend to internalize externalities but also restrict production and raise prices. 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 early periods, subsequently making production inefficient. A monopoly firm would have reduced harvesting more than a social planner who maximizes social welfare. The optimal Pigouvian tax that fully internalizes the shadow values of whaling could have achieved a socially efficient allocation.
 
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