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HERFINDAHL INDEX: A measure of concentration of the production in an industry that's calculated as the sum of the squares of market shares for each firm. This is an alternative method of summarizing the degree to which an industry is oligopolistic and the relative concentration of market power held by the largest firms in the industry. The Herfindahl index gives a better indication of the relative market control of the largest firms than can be found with the four-firm and eight-firm concentration ratios.

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OLIGOPSONY

A market characterized by a small number of large buyers controlling the buying-side of a market. Oligopsony is the buying-side equivalent of a selling-side oligopoly. Much as a oligopoly is a market dominated by a few large sellers, oligopsony is a market dominated by a few large buyers. While oligopsony could be analyzed for any type of market it tends to be most relevant for factor markets in which a handful of firms control the buying of a factor. Two related buying side market structures are monopsony and monopsonistic competition.

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