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...

In 1991, the U.S. Justice Department's Antitrust Division accused MIT and the Ivy League schools of fixing prices. The schools claimed that their cooperative behavior enabled them to concentrate financial aid on needy students and did not affect price. We analyze the empirical determinants of...