The Antitrust Simulator - HHI and merger practice

Define the relevant market for a merger, compute the HHI delta, and file the verdict the guidelines support.

A merger case lands on your desk - drawn at random from a pool that includes four real landmark cases (Kroger/Albertsons, Epic v. Apple, AB InBev/Modelo, Ohio v. Amex) and 35 generated industry variations. Each case shows a core market of named firms with revenues, two of them flagged as merging, plus a list of candidate segments you may add to the market. Each candidate lists its firms' revenues and a cross-price elasticity with the core product.

Phase 1 is market definition: toggle each candidate segment in or out. A segment belongs when its cross-price elasticity is at or above the case's substitute threshold (1.0 in every case) - customers who switch when core prices rise 5% are in the market. A live readout shows the market total, current HHI, and the delta HHI the merger would cause under your definition.

Phase 2 asks for the concentration increase, delta HHI, computed on the correctly defined market using the two merging firms' shares. Phase 3 shows the 2010 US Horizontal Merger Guidelines bands and asks you to file one of three verdicts: cleared, full investigation, or presumed anticompetitive. Each answer locks after one check; finishing loads a new random case.

Why quant interviews test this

Economic consulting interviews - especially at firms doing merger work like Compass Lexecon, Cornerstone, NERA, or Bates White - routinely open with market definition, because it is the step that dictates every number after it. Expect to be pushed on the SSNIP logic: why the merging parties want a broad market, why the agency wants a narrow one, and what evidence (diversion ratios, cross-elasticities, switching data) settles it.

The HHI mechanics show up as case math: given shares, compute the index, the delta, and apply the guidelines thresholds. Knowing delta HHI = 2 x s1 x s2 by heart, and the 1500 / 2500 / delta 100 / delta 200 screen, turns a five-minute computation into thirty seconds and signals familiarity with how merger review works.

The The Antitrust Simulator guide covers how scoring works, the strategy that wins, a worked example and the mistakes most players make.

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