TY  - JOUR
AU  - Carlton,Dennis W.
AU  - Bamberger,Gustavo E.
AU  - Epstein,Roy J.
TI  - Antitrust and Higher Education: Was There a Conspiracy to Restrict      Financial Aid?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4998
PY  - 1995
Y2  - January 1995
UR  - http://www.nber.org/papers/w4998
L1  - http://www.nber.org/papers/w4998.pdf
N1  - Author contact info:
Dennis W. Carlton
Booth School of Business
University of Chicago
5807 S. Woodlawn Ave.
Chicago, IL 60637
Tel: 847/217-6000
Fax: 312/322-0262
E-Mail: dennis.carlton@chicagobooth.edu

Gustavo Bamberger
Lexecon
E-Mail: gbamberger@lexecon.com, bamberger@lexecon.com
M2  - featured in NBER digest on 1995-04-01
AB  - In 1991, the Antitrust Division sued MIT and the eight schools in the Ivy League under Section 1 of the Sherman Act for engaging in a conspiracy to fix the prices that students pay.  The Antitrust Division claimed that the schools conspired on financial aid policies in an effort to reduce aid and raise their revenues.  The schools justified their cooperative behavior by explaining that it enabled them to concentrate aid on only those in need and thereby helped the schools to achieve their goals of need-blind admission coupled with financial aid to all needy admittees. This paper analyzes the empirical determinants of tuition and finds that the schools' agreement had no effect on average tuition paid.  The paper also analyzes the appropriate application of the antitrust laws to not-for-profit institutions.  The Court of Appeals found that it is appropriate for the courts to consider non-profit institutions' justifications for collective action (in this case, to enable the poor to attend school) under a Rule of Reason.  The Court of Appeals overturned the District Court's opinion against MIT, citing the failure of the District Court to properly apply the Rule of Reason.
ER  -