Generalized gradients, bid-ask spreads, and market equilibrium

This paper considers economies in which each agent valuates various goods by own generalized gradients. Taken together and appropriately scaled, the latter determine bid-ask spreads. When all such spreads are nil, market equilibrium prevails. Crucial for the arguments is a money commodity which denominates agents' rates of exchange or substitution. Equilibrium obtains when rates coincide across agents. The results may facilitate detailed modelling of market micro-structure, direct deals, and agent-based computations.