EXAMING WALRAS TATONNEMENT PROCESSES OF BADS: THE CASE OF THE JAPANESE SCRAP PAPERS MARKET

Abstract

The present paper empirically examines Walras tatonnement processes of bads, focusing on the Japanese scrap papers market. The demand and supply function of the scrap papers and the reproduced paper products are estimated by using the time series data. The dynamic price adjustment formula of the scrap papers is then derived from the demand and supply function and the related inventory control model. The result reveals that the Walras tatonnement processes can be applied to the scrap papers market, if we definitely consider the control of bads in stock.