Can Intense Preferences Shape Markets? Preference Concentration and Product Survival

Eleftherios Filippiadis ()
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Eleftherios Filippiadis: Department of Economics, University of Macedonia, Greece

Discussion Paper Series from Department of Economics, University of Macedonia

Abstract: This paper studies how the distribution of preference intensity affects product survival. Consumers may have the same average valuation of a product attribute, yet differ sharply in how concentrated that valuation is across the population. I show that this distinction matters for market selection. In a differentiated-product economy with fixed operating costs, a product survives only if it attracts enough revenue to cover its fixed cost. When the revenue contribution of consumers is convex in preference intensity, concentrating a fixed aggregate valuation among fewer high-intensity consumers raises the revenue of high-attribute products. Thus, small groups of strongly attached consumers can sustain varieties that would fail under a more diffuse distribution of moderate preferences. In a ranked-attribute benchmark, this condition has a simple interpretation: the product benefits from concentration when it is sufficiently distant from the share-weighted center of the active product range. The paper also separates private survival from welfare and aggregate impact. Applications to green products and privacy-oriented digital services show that cleaner or more privacy-protective varieties improve aggregate outcomes only when they sufficiently displace dirtier or more data-intensive alternatives.

Keywords: preference concentration; product survival; behavioral heterogeneity; differentiated products; green preferences; privacy preferences. (search for similar items in EconPapers)
JEL-codes: D11 D43 L11 L13 Q56 (search for similar items in EconPapers)
Date: 2026-09, Revised 2026-09
New Economics Papers: this item is included in nep-com and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:mcd:mcddps:2026_09

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