The Competition Index

The thesis will analyse the Herfindahl-Hirschmann Index and the Number of firms factors of the Competition index designed by the NMA (Dutch antitrust authority) in 2008, in order to provide a stronger theoretical foundation and improvements to the index. In particular it finds that an asymmetric division of the market shares can benefit collusion if firms differentiate in capacity. The views on the effect of increased number of firms on collusion in an empirical setting are analyzed. The thesis ends with a modified competition index and a comparison between our new scoring and the old index.