A Characterization of the Herfindahl Hirschman Index and its use in the Horizontal Merger Guidelines

Hernán Vallejo

No 19422, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE

Abstract: This article characterizes the Herfindahl Hirshman Index and its use by the Department of Justice and the Federal Trade Commission of the United States, in their Horizontal Merger Guidelines. The characterization maps ranges of the index with the level of market concentration and its changes due to horizontal mergers and acquisitions, in terms of the number of firms operating in the market and the market share of the largest active firm. The article aims to provide alternative and graphic approaches that may contribute to analyze horizontal mergers and acquisitions in an easier and expedited way, from a market concentration perspective and before there are any changes in strategic interactions or market equilibria.

Keywords: Horizontal Merger Guidelines; Herfi ndahl Hirshman Index; Market Concentrationand Enhanced Market Power (search for similar items in EconPapers)
JEL-codes: L11 L22 (search for similar items in EconPapers)
Pages: 31
Date: 2021-07-21
New Economics Papers: this item is included in nep-com, nep-ind and nep-isf
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:019422

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