A Buyer-Based Measure of Seller Concentration

I. Bos

doi:10.3390/math10142474

A Buyer-Based Measure of Seller Concentration

I. Bos^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

In most markets, buyers differ in their ability or willingness to switch supplier. This note proposes a novel industry concentration measure that takes this heterogeneity into account. The index increases in the share of captive sales, coincides with the Hirschman-Herfindahl Index when none of the buyers are captive, and takes the "pure monopoly" value of 1 when all are captive.

Original language	English
Article number	2474
Number of pages	6
Journal	Mathematics
Volume	10
Issue number	14
DOIs	https://doi.org/10.3390/math10142474
Publication status	Published - 1 Jul 2022

Keywords

captive consumers
concentration ratio
Hirschman-Herfindahl Index
market structure
seller concentration

Access to Document

10.3390/math10142474Licence: CC BY

Cite this

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abstract = "In most markets, buyers differ in their ability or willingness to switch supplier. This note proposes a novel industry concentration measure that takes this heterogeneity into account. The index increases in the share of captive sales, coincides with the Hirschman-Herfindahl Index when none of the buyers are captive, and takes the {"}pure monopoly{"} value of 1 when all are captive.",

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AB - In most markets, buyers differ in their ability or willingness to switch supplier. This note proposes a novel industry concentration measure that takes this heterogeneity into account. The index increases in the share of captive sales, coincides with the Hirschman-Herfindahl Index when none of the buyers are captive, and takes the "pure monopoly" value of 1 when all are captive.

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KW - market structure

KW - seller concentration

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