This paper examines real estate pricing featuring the price response curve, both theoretically and empirically. The Bertrand model with di¤erentiated products suggests that the price response of real estate may di¤er when properties in the vicinity are priced by an a¢ liated ...rm or one's own ...rm. This is because the ...rm can maintain the collusive state if real estate prices in the neighborhood are priced by allies, whereas it loses it if prices are priced by rivals. To examine this

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... ion, a spatial autoregressive model with autoregressive and heteroskedastic disturbances, including a share of allies in the vicinity, is estimated using data on the residential condominium market in central Tokyo. Empirical results provide support for the model prediction.