Herfindahl-Hirschman Index
Definition
Sum of squared market shares (in percent) of firms in a market. Used by antitrust authorities to gauge concentration; above 1800 counts as highly concentrated under current US merger guidelines (2500 under the older 2010 guidelines).
Example
Four firms with 30, 30, 20, 20 shares: HHI = 900 + 900 + 400 + 400 = 2600.