What are the issues with concentration measures?

1. It is often problematic to define a market. Hence, it becomes difficult to compare market concentration calculations. 2. Firms existing in market might be multiproduct or diversified. Hence, is it fair to assume that 100% of the firm is in the defined market? This leads to a need to only use a part of the firm which is often difficult. 3. Multiple firms in an industry might be owned by the same individual (Vertical ownership structure). Market concentration can then underestimate market power. 4. Constant concentration index over time does not capture shift in market shares (Identity problem) 5. Companies’ import /export conditions often neglected - correction necessary to assess competition in the domestic market. 6. SCP vs Chicago School. Efficiency hypothesis - maybe it’s wrong at all to use concentration measures to infer problems with competition.