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Micro Econ

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Historically, officials from 15 NE colleges with selective admissions policies and high tuition met each spring to compare financial aid packages for more than 10,000 common applicants. These meetings were designed to eliminate any differences in the financial aid packages offered by the various colleges. What would be the effect of the net price(tuition less financial aid) paid by applicants to the colleges participating in the meeting? Are there any factors that would work to undermine the ongoing viability of the prcatice? If so, what are these factors?

  • Micro Econ - ,

    This is a rather open ended question.
    First, I believe you need to answer the question whether the 15 colleges are profit maximizers; this strongly affects how one would answer the question. If colleges are profit maximizers, then some sort of oligopoly model and all of their associated issues would be appropriate. Otherwise, if the colleges are not profit maximizers but still compete over some metric (e.g., average SAT score of incoming freshmen, etc.), then some sort of game theory model would be appropriate.
    Sorry for the confusion and lotsa luck.

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