Dynamics of the Hirschman–Herfindahl Index under New Market Entries
Maurizio Naldi and
Economic Papers, 2018, vol. 37, issue 3, 344-362
The concentration of market power is typically measured by the Hirschman–Herfindahl Index (HHI). When a new company enters the market, the changes in the HHI reflect the change in concentration and may elicit a regulatory intervention. In this paper, we evaluate the potential benefits (HHI decrease) or harms (HHI increase) in advance of the new entry. We identify the volume of sales achieved by the newcomer leading to either situation in two paradigmatic cases: market expansion and market stagnation. We also find the maximum benefit achievable (the minimum HHI value) after the new entry. The formulas are applied to a real‐world case: a merger in the mobile telecom market.
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:econpa:v:37:y:2018:i:3:p:344-362
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0812-0439
Access Statistics for this article
Economic Papers is currently edited by Rachel Ong
More articles in Economic Papers from The Economic Society of Australia Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().