This paper develops a general preference model for analyzing parental allocations of resources among their progeny. The implications fro this model for the distribution of educational resources and earnings potentials among siblings are examined. A particular version of the preference model is estimated using data on the education and earnings of adult male twins. The estimates imply that parents care about offsprings' earnings inequality and provide more (less) resources to the less (more) able than is consistent with an investment model.

The study reports on the applicability of competing models of market information integration and dissemination in explaining the behavior of simple laboratory, one-period security markets. Returns to the security depended upon a randomly chosen state of nature. Some agents (insiders), whose identity was unknown to other agents, knew the state before the markets opened. With replication of market conditions a model based upon rational expectations principles is relatively accurate. Prices adjusted immediately to near rational expectations prices; profits of insiders were virtually indistinguishable from noninsiders; and efficiency levels converged to near 100 percent.