roughly doubled. The price response to generic entry of brand-name products has been a source of controversy. In this paper we … estimate models of price responses to generic entry in the market for brand-name and generic drugs. We study a sample of 32 … increase after entry and are accompanied by large price decreases in the price of generic drugs …

may rise due to a better match between consumers and products. Entry may have three unusual effects. First, the new price … is above the monopoly price if the two firms collude and may be above the monopoly price even if the firms play Bertrand …. Second, the Bertrand and collusive price may be identical. Third, prices, combined profits, and consumer surplus may all rise …