
Herfindahl Index - dedalus
https://en.wikipedia.org/wiki/Herfindahl%E2%80%93Hirschman_Index
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bcatanzaro
The formula hinges on defining what a market is so you can calculate market
share. That’s the part of the process that seems most subjective and error-
prone. Big companies are always seeking to define their monopoly markets as
merely a segment of a bigger market with tons of competition.

The formula here gives you a precise number, but it’s based on imprecise
inputs, so it feels pretty unsatisfying to me.

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thedudeabides5
Sure, all indexes are subject to bias and error. Guess the question is what's
your alternative?

Usually find truth is best approximated in data through triangulation with a
_lot_ of different sources, rather than this one or that one being the end
all.

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wjnc
Sorry, but he has a perfectly valid point. Defining the relevant market is The
problem in antitrust / competition policy. He deducted that from the formula.
That's astute.

If you fail to define the relevant market, you fail to spot the failing
market. This goes both ways. Sometimes products that are not even that similar
work as substitutes preventing the exercise of market power (say red bull and
coke). Other times market power in one narrow product group can work as a
stepping stone for extending market power over various markets (say, the way a
firm like Proctor and Gamble operates).

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dickeytk
This is how the US decided to reject the Shick-Harry’s razor merger:
[https://www.jdsupra.com/legalnews/when-harry-s-met-schick-
ho...](https://www.jdsupra.com/legalnews/when-harry-s-met-schick-how-
nascent-36658/)

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gnicholas
Suggest updating title to include both names. I saw this and wondered if the
guy created a different index, all on his own. I’ve never heard the HHI
referred to this way.

