A Buyer-Based Measure of Seller Concentration

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.