Suppose there are N=8 hospitals in the market, and each of them has an equal share of the market (1/8). What is the value of the Herfindahl-Hirschman Index in this hospital market? One of the hospitals gets a fancy new cardiac surgery facility, and takes market share from the other hospitals. Now its market share is 85%, and the other 7 hospitals split the remaining 15% of the market equally. What is the value of the HHI in this case? Are each of these markets competitive or concentrated?
Suppose there are N=8 hospitals in the market, and each of them has an equal share of the market (1/8). What is the value of the Herfindahl-Hirschman Index in this hospital market? One of the hospitals gets a fancy new cardiac surgery facility, and takes market share from the other hospitals. Now its market share is 85%, and the other 7 hospitals split the remaining 15% of the market equally. What is the value of the HHI in this case? Are each of these markets competitive or concentrated?
Chapter15: Oligopoly And Strategic Behavior
Section: Chapter Questions
Problem 9P
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Suppose there are N=8 hospitals in the market, and each of them has an equal share of the market (1/8).
What is the value of the Herfindahl-Hirschman Index in this hospital market?
One of the hospitals gets a fancy new cardiac surgery facility, and takes market share from the other hospitals. Now its market share is 85%, and the other 7 hospitals split the remaining 15% of the market equally. What is the value of the HHI in this case?
Are each of these markets competitive or concentrated?
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