Microeconomic foundations for the biased interaction game

The theory of microeconomics is revisited to gain insight into the underlying mechanics of sub-optimal systems in general. It challenges the prevailing view that efficient markets naturally arise from free competition and instead reformulates the market to reveal mechanisms whereby inefficient operation can naturally emerge. In particular, it shows how individual influence or power, and market scarcity inevitably lead to biased markets for emergent system operation that is anything but efficient. The paper concludes by incorporating these insights into a game-theoretic treatment of market interactions and proves this is simply a special case of the biased interaction game.