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Policy Watch: Antitrust Goes to College

Author

Listed:
  • Steven C. Salop
  • Lawrence J. White

Abstract

It may have come as a shock to many economists, especially those in academia, to learn that the Antitrust Division of the U.S. Department of Justice (DOJ) has been investigating alleged price fixing and information exchange of financial aid among 23 prestigious east coast colleges and universities. These schools include the "Ivy overlap group"—MIT, Brown, Columbia, Cornell, Dartmouth, Harvard, University of Pennsylvania, Princeton, and Yale—and the "Pentagonal/Sisters group"—Amherst, Barnard, Bowdoin, Bryn Mawr, Colby, Mount Holyoke, Middlebury, Smith, Trinity, Tufts, Vassar, Wesleyan, and Williams. We have no specific knowledge concerning the possible validity of these allegations or expertise about their legality. Rather, in this article, we wish to present the potential applicability of current antitrust doctrines to colleges and their conduct and the possible defenses that they might raise to justify their actions.

Suggested Citation

  • Steven C. Salop & Lawrence J. White, 1991. "Policy Watch: Antitrust Goes to College," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 193-202, Summer.
  • Handle: RePEc:aea:jecper:v:5:y:1991:i:3:p:193-202
    Note: DOI: 10.1257/jep.5.3.193
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.5.3.193
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    References listed on IDEAS

    as
    1. Shapiro, Carl & Willig, Robert D, 1990. "On the Antitrust Treatment of Production Joint Ventures," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 113-130, Summer.
    2. Bruce C. Greenwald & Joseph E. Stiglitz, 1986. "Externalities in Economies with Imperfect Information and Incomplete Markets," The Quarterly Journal of Economics, Oxford University Press, vol. 101(2), pages 229-264.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Michael Rothschild & Lawrence J. White, 1993. "The University in the Marketplace: Some Insights and Some Puzzles," NBER Chapters,in: Studies of Supply and Demand in Higher Education, pages 11-42 National Bureau of Economic Research, Inc.
    2. Hashem Dezhbakhsh & John A. Karikari, 2010. "Enrollment At Highly Selective Private Colleges: Who Is Left Behind?," Contemporary Economic Policy, Western Economic Association International, vol. 28(1), pages 94-109, January.
    3. Bryan Caplan & Edward Stringham, 2003. "Networks, Law, and the Paradox of Cooperation," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 16(4), pages 309-326, December.
    4. Masten, Scott E., 1995. "Old school ties: financial aid coordination and the governance of higher education," Journal of Economic Behavior & Organization, Elsevier, vol. 28(1), pages 23-47, September.

    More about this item

    JEL classification:

    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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