Name the formula for each and what makes one better than the other hint: the HHI is preferred – why?
HHI preferred because it can compare industries where a portion of the firms are larger and distort the concentartion ratio concentartion ratio: add up market share of N largest firms HHI: square the shares and add them up less than 1 competitve over 1.8 not cometitve
less than 0.1 more than .18 sorry
Concentration Ratio Sum up the market shares of N companies HHI Square the market shares of N companies and add them up Maybe it is preferred because it also tells you the number of firms with the same size in terms of market share (1/HHI)
can someone throw some likght what is HHI and where i can read about it? seems like i have no idea what this ratio is. is it part of course?
pepp Wrote: ------------------------------------------------------- > can someone throw some likght what is HHI and > where i can read about it? > > seems like i have no idea what this ratio is. is > it part of course? it is in econ book all the guys who got it, good job. I expect this to show up in test. Every sell sider I know talks about industry dynamics.
pepp, some explanation and a puzzle here: http://www.analystforum.com/phorums/read.php?11,705454,706254#msg-706254