00:01
One way to measure the competitiveness of an industry is to use the herfidol hirschman index.
00:05
So what that is, i'm going to abbreviate that as h -h -i.
00:10
And what that does is you add up the squared number of market share for each firm in that industry.
00:18
Right.
00:19
So let's say that you have, firm one has a share s.
00:24
Let's say s -1 and you square that.
00:25
Firm 2 has a share s -2, square that.
00:28
And then you add up all the squares for each firm.
00:33
And the higher, the hha, the less competitive in industry.
00:37
That means that the shares are more concentrated within a few leading controlling firms rather than more evenly distributed among more competitive firms.
00:47
So let's look at an example to get an idea of how these numbers work.
00:51
So let's say in one industry, we have 10 different firms, and each of them have a market share of 10%.
00:58
So each of them control 10 % of the market.
01:01
So what you would do is you would square each of that...