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Necessary and sufficient conditions in merger control: the use of HHI and threshold value

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  • Christopher McIntosh
  • Stefan Hellmer

Abstract

This article considers two coarse measures applicable to antitrust policy: one of market concentration, the Herfindahl--Hirschman Index (HHI) and one of market dominance, threshold value. Calculations of threshold value are compared to HHI values to determine when thresholds might be of specific use in merger cases. Many scenarios which satisfy the threshold conditions (indicating a dominant firm exists) are consistent with high HHI numbers such that current US Department of Justice and European Commission guidelines (based on HHIs) for merger concerns will have been met. It is suggested as a rule of thumb that HHIs be used as necessary conditions and threshold value be considered sufficient conditions for further case review.

Suggested Citation

  • Christopher McIntosh & Stefan Hellmer, 2012. "Necessary and sufficient conditions in merger control: the use of HHI and threshold value," Applied Economics, Taylor & Francis Journals, vol. 44(7), pages 867-878, March.
    • Handle: RePEc:taf:applec:44:y:2012:i:7:p:867-878
    DOI: 10.1080/00036846.2010.524632
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    4. Ivaldi, Marc & Verboven, Frank, 2005. "Quantifying the effects from horizontal mergers in European competition policy," International Journal of Industrial Organization, Elsevier, vol. 23(9-10), pages 669-691, December.
    5. Ivaldi, Marc & Verboven, Frank, 2005. "Quantifying the effects from horizontal mergers: Comments on the underlying assumptions," International Journal of Industrial Organization, Elsevier, vol. 23(9-10), pages 699-702, December.
    6. Hellmer, Stefan & Wårell, Linda, 2009. "On the evaluation of market power and market dominance--The Nordic electricity market," Energy Policy, Elsevier, vol. 37(8), pages 3235-3241, August.
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    Cited by:

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    2. Pierre Polzin & Pierre Polzin & José Borges & António Coelho, 2016. "Applying an Extended Kernel Density 4-Step Floating Catchment Area method to identify priority districts to promote new publicly financed supply of gastroenterology exams," EcoMod2016 9584, EcoMod.

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