Final answer:
The claim that all firms have almost entirely emergent strategies is false; firms have a mix of deliberate and emergent strategies. The four-firm concentration ratio emphasizes the largest firms, while the HHI measures all firms' market shares.
Step-by-step explanation:
The statement that all firms have almost entirely emergent strategies is false. Firms often employ a mix of deliberate and emergent strategies. While some aspects of their strategies might evolve in response to unforeseen circumstances or opportunities, which would be considered emergent, firms also set specific goals and plans which constitute their deliberate strategies.
Concerning market concentration measures, the four-firm concentration ratio indeed puts more emphasis on the top four firms in an industry, often highlighting the dominance of one or two very large firms. In contrast, the Herfindahl-Hirschman Index (HHI) considers the market share of all firms in an industry and gives more weight to firms with larger market shares, providing a more precise measure of market concentration.
As for mergers, a merger between two firms not in the top four can affect both the four-firm concentration ratio and the HHI because both measure market concentration, albeit in different ways. The merger would increase the total market share of the top firms, thereby impacting both indices.
Evidence of serious competition between firms in an industry includes innovation, price competitiveness, and frequent market entry and exit. Highly competitive industries, such as the technology sector and retail, typically exhibit these characteristics.