  Antitrust authorities routinely rely on concentration measures to evaluate
the potential negative impacts of mergers. Using a first-order approximation
argument with logit and CES demand, I show that the welfare effect of a merger
on consumer surplus is proportional to the change in the Herfindahl-Hirschman
index, where the proportionality coefficient depends on price responsiveness
parameter, market size, and the distribution of merging firms' shares. This
paper elucidates how HHI measures inform the market power effects of mergers.
