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 ##### Abstract
 
-Economic theories predict that unregulated commons result in inefficient resource allocation. However, there is limited evidence regarding the causes and welfare consequences of competitive entry and investment in common-pool resources. This paper develops a dynamic empirical framework for resource exploitation and applies it to the 19th-century American whaling industry, a global commons for oil production. The analysis reveals that open access and rivalry lead to a prevalent excess of players and capital in the industry. An optimal tax per whale achieves welfare gains comparable to those under a social planner and perfect collusion, thereby mitigating congestion and resource depletion. This study underscores the significance of the long-run industry structure in common-pool problems and the need for policies to alleviate externalities.
+Inefficient resource allocation in unregulated commons poses classic economic issues. However, limited evidence exists regarding how competitive entry and investment affect market performance in common-pool resources. This paper develops a dynamic empirical framework for resource exploitation and applies it to the 19th-century American whaling industry, a global commons for oil production. The analysis reveals that open access and rivalry lead to a prevalent excess of players and capital in the industry. An optimal tax per whale achieves welfare gains comparable to those under a social planner and perfect collusion, thereby mitigating congestion and resource depletion. This study underscores the significance of the long-run industry structure in common-pool problems and the need for policies to alleviate externalities.
 
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