Monopolistic Competition and Price Discrimination as a Development Company Strategy in the Primary Housing Market

• Authors: Jacek Łaszek , Krzysztof Olszewski , Joanna Waszczuk
• Languages of publication: EN

Abstracts

EN

Firms operating in the property sector use information asymmetry and the local monopoly to differentiate prices of housing units. Selling similar housing to purchasers at various prices allows them to maximize profits. The aim of this article is to analyze empirically the behavior of developers, that shape the market situation. It is necessary to depart from the classical analysis of enterprises that operate in a free and competitive market and produce typical, homogeneous goods. We analyze firms that produce heterogeneous goods and make individual trans-actions with each client. We use the hedonic regression to compare the theoretical and empirical prices per sq. m. of dwelling in the primary market in Warsaw and find significant dispersions. The price discrimination strategy, can be one of the explanations of the observed high, upward elasticity of prices.

Keywords

EN

Monopolistic competition; price differentiation; housing market; information asymmetry

Discipline

• SOCIOLOGY: SOCIOLOGY

• Publisher: Institute of Sociology, Czech Academy of Sciences
• Journal: Critical Housing Analysis
• Year: 2016
• Volume: 3
• Issue: 2
• Pages: 1-12
• Document type: ARTICLE

Contributors

author

Jacek Łaszek

• Warsaw School of Economics and Narodowy Bank Polski, Financial Stability Department, ul. Świętokrzyska 11/21, 00-919 Warszawa, Poland

author

Krzysztof Olszewski

• Warsaw School of Economics and Narodowy Bank Polski, Financial Stability Department, ul. Świętokrzyska 11/21, 00-919 Warszawa, Poland

author

Joanna Waszczuk

• Warsaw School of Economics and Narodowy Bank Polski, Financial Stability Department, ul. Świętokrzyska 11/21, 00-919 Warszawa, Poland

Identifiers

DOI

10.13060/23362839.2016.3.2.286