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Price Discrimination Through Barter: A Theory and Evidence from Russia

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  • Sergei Guriev

    (New Economic School)

  • Dmitry Kvassov

    (Pennsylvania State University)

Abstract

We build a model of imperfect competition where firms can sell for cash or in-kind payments. Barter is indivisible, and there is no double coincidence of wants. Despite these deficiencies, barter emerges in equilibrium as a means of price discrimination if market power is sufficiently concentrated. The model predicts negative correlation between number of sellers and share of barter in sales. We also show that barter disappears at certain level of concentration. Using survey data on Russian firms, we show that empirical evidence is consistent with predictions of the model. Sergei Guriev, Ph.D.

Suggested Citation

  • Sergei Guriev & Dmitry Kvassov, 2000. "Price Discrimination Through Barter: A Theory and Evidence from Russia," Econometric Society World Congress 2000 Contributed Papers 0397, Econometric Society.
    • Handle: RePEc:ecm:wc2000:0397
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    References listed on IDEAS

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    Cited by:

    1. Dolud, Olena, 2004. "Nichtmonetäre Transaktionen in der ukrainischen Landwirtschaft: Determinanten, Spezifika und Folgen," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 24, number 93080.

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