The authors develop a model of market efficiency assuming private information is partially revealed to uninformed traders via the behavior of those who are informed. This partial revelation of information model is tested in fourteen computerized double auction laboratory markets. It explains the...

The authors examine the price and allocation of purchased information and of the underlying asset in eight double-auction asset market experiments. Observed outcomes support fully revealing rational expectations in simple environments in which uninformed traders can easily infer the private...

In our laboratory customer markets, sellers post price and buyers incur cost (controlled at zero, low and high values) when they switch to a new seller. Sellers' production costs follow various random walks in 28 sessions, each with 50-100 trading periods. We find that prices are sticky, and...