Abstract
Concentration is a characterization of the size distribution and quantity of competing firms within a specific market or industry. The most common concentration measures are the Herfindahl index and the n-firm concentration rate. The Herfindahl index is the sum of the squared market shares of all the firms in a market, whereas the n-firm concentration rate is the sum of the market shares of the n biggest firms. These measures are a significant reflection of the underlying degree of competitiveness, but are sensitive to the adopted market definition, and must be interpreted carefully depending on the specifics of the case.
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Carranza, J.E. (2018). Concentration Measures. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2752
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DOI: https://doi.org/10.1057/978-1-349-95189-5_2752
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