Oligopoly Extraction of a Common Property Natural Resource: The Importance of the Period of Commitment in Dynamic Games

The theory of noncooperative dynamic games has provided an extremely powerful framework for studying many of the classic questions in industrial organization - for example, questions about resource extraction, advertising, research and development, investment in new capacity; and barriers to entry where interactions over time among few firms are involved. However, an important methodological issue arises when economic competition over time is modeled as a dynamic game. The issue is the appropriate formulation of the players' strategy spaces.