Economics at your fingertips  

Dynamics of the Hirschman–Herfindahl Index under New Market Entries

Maurizio Naldi and Marta Flamini

Economic Papers, 2018, vol. 37, issue 3, 344-362

Abstract: 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.

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

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 ().

Page updated 2019-09-07
Handle: RePEc:bla:econpa:v:37:y:2018:i:3:p:344-362