Update 1.md

content/papers/1.md

@@ -3,15 +3,15 @@ title: "Navigating the commons"
 author: "Job market paper"
 date: 2024-04-01
 url: /1/
-description: "This paper develops a dynamic empirical model to identify the drivers of excessive competition in common-pool resources. Using data from the American whaling industry, the estimated model reveals that uncoordinated behaviors of whaling firms led to substantial welfare losses. While perfect collusion could have mitigated inefficiencies, it would still yield suboptimal allocation. An optimal policy prevents the tragedy of the commons while minimizing market power."
-summary: "This paper develops a dynamic empirical model to identify the drivers of excessive competition in common-pool resources. Using data from the American whaling industry, the estimated model reveals that uncoordinated behaviors of whaling firms led to substantial welfare losses. While perfect collusion could have mitigated inefficiencies, it would still yield suboptimal allocation. An optimal policy prevents the tragedy of the commons while minimizing market power."
+#description: "This paper develops a dynamic empirical model to identify the drivers of excessive competition in common-pool resources. Using data from the American whaling industry, the estimated model reveals that uncoordinated behaviors of whaling firms led to substantial welfare losses. While perfect collusion could have mitigated inefficiencies, it would still yield suboptimal allocation. An optimal policy prevents the tragedy of the commons while minimizing market power."
+#summary: "This paper develops a dynamic empirical model to identify the drivers of excessive competition in common-pool resources. Using data from the American whaling industry, the estimated model reveals that uncoordinated behaviors of whaling firms led to substantial welfare losses. While perfect collusion could have mitigated inefficiencies, it would still yield suboptimal allocation. An optimal policy prevents the tragedy of the commons while minimizing market power."
 
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 ##### Abstract
 
-Rising competition in the commons poses risks of resource depletion and congestion. This paper introduces a dynamic empirical model to identify the drivers of excessive entry and investment, along with low rates of exit and divestment. Using data from the American whaling industry, the estimated model reveals that uncoordinated behaviors of whaling firms caused welfare losses of 40\% over the century. Perfect collusion could have reduced inefficiencies by 20\% through internalizing externalities. However, it would still result in suboptimal allocations due to higher prices and lower consumer welfare. The study proposes an optimal tax policy derived from the social planner’s allocation to prevent the tragedy of the commons while minimizing distortions from market power. 
+Rising competition in the commons poses risks of resource depletion and congestion. This paper develops a dynamic empirical model to identify the drivers of excessive entry and investment, along with low rates of exit and divestment. Using data from the American whaling industry, the estimated model reveals that uncoordinated behaviors of whaling firms caused welfare losses of 40% over the century. Perfect collusion could have reduced inefficiencies through internalizing externalities, but it would still result in a suboptimal allocation due to higher prices and lower consumer welfare. Derived from the social planner’s first-best allocation, an optimal tax policy would have prevented the tragedy of the commons while minimizing distortions from market power.
 
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