Price Discrimination In New Apartments Market In Russia

Abstract

The paper explores practical issues of using price discrimination in the markets of new apartments. First, we discuss various strategies of price discrimination which may be applied by construction companies to increase revenue (i. e. discrimination by observable characteristics or by self-selection). Then we suggest an approach for empirical estimation of possibility of price discrimination in this market, based on the survey of real buyers of apartments. Finally we present results of the pilot application of this approach on the basis of a construction company in St. Petersburg and suggest the next steps for development of this approach.