Standard theory of price formation in perfectly competitive markets contends that buyers and sellers bargain and recontract until the price is reached at which the quantity offered for sale is equal to the quantity demanded.1 All contracts are then made at the equilibrium price which is the only price observed in the market. Three important differences between the model and actual markets are that the latter operate under sequential binding contracts which are made at discrete points in time with imperfect information. These differences raise several questions concerning the extent to which prices and quantities observed in real markets reflect the theoretical equilibrium price given by the underlying market supply-and-demand curves in force at the opening of the market. The first of these questions is whether the average observed price is equal, in a statistical sense, to the theoretical equilibrium price. Ignorance on the part of the buyers and sellers as to the true equilibrium price and the shifting of market supply-and-demand curves as buyers and sellers make contracts and leave the market are both factors allowing for discrepancies between actual and theoretical equilibrium prices. Presumably, in the case of perfect information by all participants, all transactions are made at the equilibrium price. This is because buyers would be unwilling to pay a higher price and sellers to accept a lower one. On the other hand, in the presence of incomplete information, Lancaster (1969, p. 42) suggests that, if the actual price is above the equilibrium price, some sellers sensing that the price is too high will quickly lower their prices but not to the equilibrium price, make their sale, and leave the market. This argument from the buyer's side describes behavior below the equilibrium price, so that it is possible for actual prices to be dispersed about their theoretical value. When these more astute buyers and sellers leave the market, the market supply-and-demand curves shift to the left. However, they need not shift by the same amount so that a new theoretical price is defined. The market may then converge on this changed equilibrium price, resulting in an aver-