IDEAS home Printed from https://ideas.repec.org/p/isu/genstf/202410291651270000.html
   My bibliography  Save this paper

When Different Market Concentration Indices Agree

Author

Listed:
  • Hennessy, David
  • Lapan, Harvey

Abstract

Market concentration ratios are popular statistics for characterizing the extent of market dominance in an imperfectly competitive market, but these ratios may not agree when comparing two markets. Neither do they necessarily agree with the Herfindahl-Hirschman or entropy indices. This letter compares two Cournot oligopoly markets in which firms have constant unit costs. It is shown that the majorization pre-ordering on normalized marketing margin vectors is both necessary and sufficient for all aforementioned indices to agree on which is the more concentrated market.

Suggested Citation

  • Hennessy, David & Lapan, Harvey, 2006. "When Different Market Concentration Indices Agree," ISU General Staff Papers 202410291651270000, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genstf:202410291651270000
    as

    Download full text from publisher

    File URL: https://dr.lib.iastate.edu/server/api/core/bitstreams/afa1fe17-63ee-41f7-af87-c6d449dea9d0/content
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Zhao, Jingang, 2001. "A characterization for the negative welfare effects of cost reduction in Cournot oligopoly," International Journal of Industrial Organization, Elsevier, vol. 19(3-4), pages 455-469, March.
    2. Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: an Inverted-U Relationship," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 701-728.
    3. repec:bla:econom:v:50:y:1983:i:197:p:3-17 is not listed on IDEAS
    4. Greg Shaffer & Stephen W. Salant, 1999. "Unequal Treatment of Identical Agents in Cournot Equilibrium," American Economic Review, American Economic Association, vol. 89(3), pages 585-604, June.
    5. Chambers,Robert G. & Quiggin,John, 2000. "Uncertainty, Production, Choice, and Agency," Cambridge Books, Cambridge University Press, number 9780521622448, September.
    6. Efe A. Ok, 1997. "A note on the existence of progressive tax structures," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 14(4), pages 527-543.
    7. Harvey E. Lapan & David A. Hennessy, 2002. "Symmetry and order in the portfolio allocation problem," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 19(4), pages 747-772.
    8. Dasgupta, Partha & Sen, Amartya & Starrett, David, 1973. "Notes on the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 6(2), pages 180-187, April.
    9. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hrazdil, Karel & Zhang, Ray, 2012. "The importance of industry classification in estimating concentration ratios," Economics Letters, Elsevier, vol. 114(2), pages 224-227.
    2. ZHANG, Lu & GUO, Qing & ZHANG, Junbiao & HUANG, Yong & XIONG, Tao, 2015. "Did China׳s rare earth export policies work? — Empirical evidence from USA and Japan," Resources Policy, Elsevier, vol. 43(C), pages 82-90.
    3. Baum, Leonard & Bryson, Joanna J., 2024. "Policy lessons from China: A quantitative examination of China's new competition regime for the digital economy," SocArXiv zyc6s, Center for Open Science.
    4. Darko Tipurić & Mirjana Pejić Bach, 2009. "Changes in Industrial Concentration in the Croatian Economy (1995-2006)," EFZG Working Papers Series 0903, Faculty of Economics and Business, University of Zagreb.
    5. Mohammed, Nafisah & ismail, abdul & Muhammad, Junaina, 2016. "Concentration and Competition in Dual Banking Industry: A Structural Approach," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 50(2), pages 49-70.
    6. Satya R. Chakravarty & Palash Sarkar, 2021. "An inequality paradox: relative versus absolute indices?," METRON, Springer;Sapienza Università di Roma, vol. 79(2), pages 241-254, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hennessy, David A. & Lapan, Harvey E., 2005. "Statistical Moments Analysis of Production and Profits in Multi-Product Cournot Oligopoly," Staff General Research Papers Archive 12471, Iowa State University, Department of Economics.
    2. Hennessy, David A. & Lapan, Harvey E., 2009. "Harmonic symmetries of imperfect competition on circular city," Journal of Mathematical Economics, Elsevier, vol. 45(1-2), pages 124-146, January.
    3. Marat Ibragimov & Rustam Ibragimov, 2007. "Market Demand Elasticity and Income Inequality," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 32(3), pages 579-587, September.
    4. Salant, Stephen W. & Shaffer, Greg, 2002. "Using Lorenz curves to represent firm heterogeneity in Cournot games," MPRA Paper 21876, University Library of Munich, Germany.
    5. Allanson, Paul & Hubbard, Lionel, 1999. "On the Comparative Evaluation of Agricultural Income Distributions in the European Union," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 26(1), pages 1-17, March.
    6. Belhadj, Besma & Limam, Mohamed, 2012. "Unidimensional and multidimensional fuzzy poverty measures: New approach," Economic Modelling, Elsevier, vol. 29(4), pages 995-1002.
    7. Chakravarty, Satya R. & Sarkar, Palash, 2022. "A synthesis of local and effective tax progressivity measurement," MPRA Paper 115180, University Library of Munich, Germany.
    8. Satya R. Chakravarty & Pietro Muliere, 2003. "Welfare indicators: A review and new perspectives. 1. Measurement of inequality," Metron - International Journal of Statistics, Dipartimento di Statistica, Probabilità e Statistiche Applicate - University of Rome, vol. 0(3), pages 457-497.
    9. Nanak Kakwani & Marcelo Neri & Hyun H. Son, 2006. "Linkages between Pro-Poor Growth, Social Programmes and Labour Market: The Recent Brazilian Experience," Working Papers 26, International Policy Centre for Inclusive Growth.
    10. Joseph E. Stiglitz & Andrew Charlton, 2005. "Un cycle de négociations commerciales pour le développement ?," Revue d’économie du développement, De Boeck Université, vol. 13(4), pages 17-54.
    11. Alain Chateauneuf & Patrick Moyes, 2002. "Measuring inequality without the Pigou-Dalton condition," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00156475, HAL.
    12. Carbonell-Nicolau, Oriol & Llavador, Humberto, 2018. "Inequality reducing properties of progressive income tax schedules: the case of endogenous income," Theoretical Economics, Econometric Society, vol. 13(1), January.
    13. Jean-Yves Duclos & Paul Makdissi & Quentin Wodon, 2008. "Socially Improving Tax Reforms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1505-1537, November.
    14. Stiglitz, Joseph E., 2002. "New perspectives on public finance: recent achievements and future challenges," Journal of Public Economics, Elsevier, vol. 86(3), pages 341-360, December.
    15. Gustavo Bergantiños & Juan D. Moreno-Ternero, 2022. "On the axiomatic approach to sharing the revenues from broadcasting sports leagues," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 58(2), pages 321-347, February.
    16. Oscar Bajo & Rafael Salas, 2002. "Inequality foundations of concentration measures: An application to the Hannah-Kay indices," Spanish Economic Review, Springer;Spanish Economic Association, vol. 4(4), pages 311-316.
    17. Anwesha Banerjee & Nicolas Gravel, 2020. "Contribution to a public good under subjective uncertainty," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(3), pages 473-500, June.
    18. Kakwani, Nanak & Neri, Marcelo Côrtes & Son, Hyun H., 2010. "Linkages Between Pro-Poor Growth, Social Programs and Labor Market: The Recent Brazilian Experience," World Development, Elsevier, vol. 38(6), pages 881-894, June.
    19. WANG, Zuxiang & SMYTH, Russell & NG, Yew-Kwang, 2009. "A new ordered family of Lorenz curves with an application to measuring income inequality and poverty in rural China," China Economic Review, Elsevier, vol. 20(2), pages 218-235, June.
    20. John P. Formby & Steven G. Medema & W. James Smith, 1995. "Tax Neutrality and Social Welfare in a Comptutational General Equilibrium Framework," Public Finance Review, , vol. 23(4), pages 419-447, October.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:isu:genstf:202410291651270000. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Curtis Balmer (email available below). General contact details of provider: https://edirc.repec.org/data/deiasus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.