The notion of price efficiency is discussed in the context of an optimal information market. Approaches for assessing price or market efficiency are examined, including temporal, spatial, and form-transformation paradigms. The interdependent nature of these paradigms is stressed. Finally, a review is conducted of recent price efficiency research in cash, futures, and manufacturing-retailing markets. Research generally has paid inadequate attention to agents' costs, including the cost of risk and the human capital cost of acquiring and evaluating information.
