Some Notes on Applying the Herfindahl-hirschman Index
نویسنده
چکیده
The Herfindahl-Hirschman Index is one of the most commonly used indicators to detect anticompetitive behavior in industries. In fact, an increase in the value of the index is usually interpreted as an indicator of actions which may lessen competition or even create a monopoly. In this paper we show that this is not always the case. If all firms cooperate, then the index cannot be used since it does not depend on the cooperation level. We also show an example when competition even has a decreasing effect on the value of the index.
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