From the textbook “Principles of microeconomics/Mankiw/5th edition/”(refer to Chapter 17, Figure 4) you see a common resources game that asks "Should we drill another well or not?" Consider this game and describe what the dominant strategy is (as per your text). Consider what will happen if this becomes a repetitive game (both oil companies knowing they will share many oil fields over the next years). Will the dominant strategy survive, and—if not—what strategy could emerge as "best"?

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If 12 million worth revenue can be generated by pumping than both the firms by drilling 1 well each ... View the full answer