The following are the market shares of the Internet search engines (as of Decemb

Question

The following are the market shares of the Internet search engines (as of December 2017, taken from Market Share Statistics for Internet Technologies). Use these to answer questions 8-10. Google Baidu Bing Yahoo! Yandex Ask DuckDuckGo 0.20% Naver AOL Dogpile 74.54% 10.44% 7.92% 5.53% 0.76% 0.27% 0.11% 0.04% 0.04% Calculate concentration ratio CR, (in decimal form. That is, if you find CR equal to 79.3%, enter just the number 0.793 here) 8. Calculate concentration ratio CRs (in decimal form. That is, if you find CR equal to 79.3%, enter just the number 0.793 here) 9. 10. Calculate Herfindahl-Hirschman Index HHI (on the scale 0 to 10,000)

Explanation / Answer

Concentration ratio is the measure to evaluate the market shares of different market competitors and competition in the industry.

CR4 concentration ratio is the sum of the top 4 firms’ market share.

CR4 = 74.54% + 10.44% + 7.92% + 5.53% = 98.43% or 0.9843

CR8 concentration ratio is the sum of the top 8 firms’ market share.

CR8 = 74.54% + 10.44% + 7.92% + 5.53% + 0.76% + 0.27% + 0.20% + 0.11% = 99.77% or 0.9977

HHI index is the sum of the squares of market shares of each firm.

HHI index = (74.54%)2 + (10.44%)2 + (7.92%)2 + (5.53%)2 + (0.76%)2 + (0.27%)2 + (0.20%)2 + (0.11%)2 + (0.04%)2 + (0.04%)2 = 5759.2183

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