Theoretically, most of the economists show that the land prices should be equal to the sum of the discounted future rents. However, the real land prices are more volatile than such fundamental values and it is generally believed that non-rationality causes the excess volatilities. In this paper, I propose the new economic model of the land prices, which can explain the great fluctuations of the land prices, such as the "Bubble" phenomenon in Japan. The model is characterized by discriminating between the new and continued contracted rents, and supposing that the continued contracted rents is rigid. In this setting, the market prices of land can differ from fundamental values without non-rationality, and it is important that the determinants of the gap is the bargaining power of the players. On the basis of this theory, it is quite likely that the "Bubble" phenomenon in Japan may not be bubble.

千葉大学総合政策学会