Historically, officials from 23 elite northeastern colleges with selective admissions policies and high tuition met each spring to compare financial aid packages for more than 10,000 common applicants. The meetings, known as “Overlap,” were designed to eliminate any differences in the financial aid packages offered by the various colleges. What would you predict would be the effect on the net price (tuition less financial aid) paid by applicants to the colleges participating in the Overlap meetings? Are there any factors that would work to undermine the ongoing viability of the Overlap practice? If so, what might these factors be?
Answer to relevant QuestionsWhat is a prisoner’s dilemma game? Why is it relevant in evaluating the likelihood of cheating in a cartel?Why don’t consumers become fully informed about the prices different firms charge? If consumers are not fully informed, why is a firm likely to possess some degree of market power? What is a dominant- strategy equilibrium? What is a Nash equilibrium? Is it possible for a Nash equilibrium to exist where neither player has a dominant strategy? Use a diagram to illustrate the “hoped for” result of natural monopoly regulation that attempts to set a price equal to average cost. What are the difficulties in achieving this out-come? Would an unregulated natural ...“College teachers are no more productive today than they were 50 years ago, yet they are paid three times as much today. They are obviously not being paid according to their marginal productivity.” Discuss.
Post your question