Herfindahl-Hirschman Index market, factor, together, share

franzino

In order to calculate you take the market share of each firm and square it and add them up all together right? What is the factor that you multiply by? 10,000?

lc26mizzou

hey Chuck. it's the sum of the first 50 firms' market share squared.

a monopoly would be one firm having 100% market share: 100^2 = 10,000

any additional firms would generate results lower than 10,000

got it?

Daniel1985

just square each company's market share and sum them.

If you imagine there is only one company in a monopoly that company would have 100% of the market share, so 10,000 is the max possible

100 * 100 = 10,000

Typically any industry with a HH index over 1800 is considered non-competitive

Bulla564

keelim: your ranges are off. look at page 112 in the textbook.

HHI ranges:

perfect competition: <100
monopolistic competition: 101-999
oligopoly: >1000
monopoly: 10000

glad this question was up. i was too lazy to memorize the table...

hariRaj

1. Take the percentage concentration
2, Square it up
3. Repeat 1 and 2 for the respective firms
4. Sum them up

10000 Monopoly
>=1800 Oligopoly
1000=<X<1800 Monopolistic Competition
1000< Perfect competition

Have I got a solid grasp on this?

ishfaque

Gotcha. Thanks

soddy1979

Thanks man. I forgotten where I got the number. But I think I will stick with pg 110.



Edited 1 time(s). Last edit at Friday, June 5, 2009 at 03:00AM by keelim.

invic

i was confused by it as well when i read the section. that's why i got lazy and didn't really wanna memorize it precisely. but after this thread, i'm just going to memorize the table.