engleski

Measuring concentration in the energy markets

Several methods are recognized by experts for measuring a relative amount of concentration in the market and for evaluating acquisitions or mergers. This paper outlines the basic characteristics of the Rosenbluth-Hall-Tideman Index (RHTI), the Entropy Index (H), the Comprehensive Measure of Concentration (CCI), the Bain Index of Monopoly (o), the Lerner Index of Monopoly Power (L), and the Landes-Posner Index (LP). Furthermore, the paper analyzes the Hirschman-Herfindahl Index (HHI) and the Concentration Ratio (CR) which are the two most suitable measures, according to the author's opinion, for measuring the relative amount of concentration in the industry and for evaluating acquisitions or mergers. In the paper the empirical results were calculated regarding theoretical cases prepared for this purpose (for two different energy activities in the Croatian energy market). The author discusses the results separately in the empirical results' section. Special attention is given to the original diagram - the Cumulative market shares of the observed companies in the energy market, as a useful method for evaluating the market shares.

monopoly; market concentration; Herfindahl-Hirschman Index; Concentration Ratio

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