The entry and exit of products, rather than firms, serve as the main equilibrating force in many markets, so accurately predicting changes from a merger or bankruptcy should incorporate this behavior. This paper estimates a structural model of the US commercial vehicle market and demonstrates the importance of allowing for endogenous product offerings in the context of the $85 billion automotive industry bailout in 2009. Under alternate policies that facilitate an acquisition or liquidation of GM and Chrysler, product entry and exit moderate markup increases and output decreases by up to three-quarters.

Entry represents a fundamental threat to cartels. We study the extent and effect of this behavior in the largest price-fixing case in US history, which involves generic drug manufacturing. We link information on the cartel’s internal operations to regulatory filings and market data. There is a substantial increase in entry after cartel formation, but regulatory approvals delay most entrants by two to four years. We estimate a structural model and simulate counterfactual equilibria. Absent entry, cartel profits would be dramatically higher. Correspondingly, reducing regulatory delays by just 1–2 years equates to consumer compensating variation of $612 million–$1.5 billion.