LIMITATIONS IN THE APP LICATION OF CONCENTRATION INDICATORS – EXAMPLE OF INSURANCE MARKET IN SERBIA, CROATIA, SLOVENIA, ROMANIA AND AUSTRIA

Ljiljana Maksimović and Milan Kostić
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Ljiljana Maksimović: University of Kragujevac
Milan Kostić: University of Kragujevac

Serbian Association of Economists Journal, 2012, issue 3-4, 199-205

Abstract: Contemporary competition policy is characterized by the application of economic principles and economic analysis in its legal framework in order to measure companies’ anti-competitive behavior. The aim of the paper is to show the possibilities and limitations of indicator application as an instrument for the assessment of companies’ non-competitive behavior concentration on the example of the insurance market of the selected countries (Serbia, Croatia, Slovenia, Romania and Austria). The paper analyses the following indicators: Concentration ratio of the four largest companies, Herfindahl-Hirschman index, Lorenz curve, Gini coefficient and Entropy index. The analysis showed that independent application of indicator concentration is not sufficient and should be supplemented with qualitative data on: market characteristics, industry tradition, the height of entry barriers, manager behavior and the like. Only then one can expect that the market concentration analysis is complete and useful for the implementation of anti-monopolistic measures.

Keywords: competition policy; concentration indicators; limitations; analysis of market characteristics. (search for similar items in EconPapers)
JEL-codes: E00 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:srb:journl:y:2012:i:3-4:p:199-205

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