<p>Convex preferences simply exist. They are a fundamental innate feature of consumers and exist independently of markets. (Some) people can have convex preferences even in a centralized communist economy without markets. They just have these preferences.</p>
<p>For example, in microeconomics you could say preferences are just as fundamental as a person’s eye color, which exists regardless of circumstances.</p>

CC BY-SA 4.0
2022-10-08T20:50:37.233Z
If your claim is more than "the existence of convex preferences is an assumption" can you please support it with some (empirical) references?
Giskard
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2022-10-08T14:32:07.087Z
2022-10-08T14:32:07.087Z
BB King
<p>From an intuitive point of view, convexity of preferences can be interpreted as a 'taste for diversification', that is a consumer prefers (at least weakly) bundles more 'balanced ' with respect to the quantity of each good to 'unbalanced' bundles, heavily weighted toward one commodity.</p>
<p>From Mas Colell, Green, Whinston, <em>Microeconomc Theory</em>, 1995, p. 44:</p>
<blockquote>
<p>Convexity can also be viewed as the formal expression of a basic
inclination of economic agents for diversification. Indeed, under
convexity, if <span class="math-container">$x$</span> is indifferent to <span class="math-container">$y$</span> , then <span class="math-container">$\frac{1} {2}
 x+\frac{1} {2} y$</span>, the half mixture of <span class="math-container">$x$</span> and <span class="math-container">$y$</span>, cannot be worse
than either <span class="math-container">$x$</span> and <span class="math-container">$y$</span>. [...] A taste for diversification is a
realistic trait of economic life.</p>
</blockquote>
<p>Therefore, for a monopolist, it could be convenient to produce two differentiated products, instead of only one.</p>

CC BY-SA 4.0
2022-10-08T20:52:07.123Z
Hi! You quote a plausible argument, but could you please support the existence of convex preferences with empirical references?
Giskard
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2022-10-09T15:24:00.070Z
Hi Giskard! No. I tried to give an intuitive grasp of the concept of convexity of preferences,  beyond formalization, as I thought the OP asked for, to understand, for instance, the logic of the behavior of a monopolist. I can’t quote experimental researches about actual existence of convex preferences.
BakerStreet
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2022-10-08T15:51:11.007Z
2022-10-08T15:59:25.997Z
2022-10-08T15:59:25.997Z
BakerStreet
<p>Could you explain intuitively why the phenomena of convex preference exist in the market?</p>

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2022-10-08T11:08:16.680Z
What do markets have to do with them?
Michael Greinecker
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2022-10-08T11:46:24.407Z
@MichaelGreinecker Like, because consumers have preference convexity, a monopolist who originally sells only one product in the market can surely make more money after introducing a new product with differentiated quality. I don't know if I understand your question.
Aaron Tseng
<microeconomics><preferences>
Intuitive Explanation of Convex Preference
Aaron Tseng
# Intuitive Explanation of Convex Preference

(Asked by: username_0 on 2022-10-08)

Could you explain intuitively why the phenomena of convex preference exist in the market?

**Tags:** microeconomics, preferences
> **Comments:**
> **username_1**: What do markets have to do with them?  
> **username_0**: @MichaelGreinecker Like, because consumers have preference convexity, a monopolist who originally sells only one product in the market can surely make more money after introducing a new product with differentiated quality. I don't know if I understand your question.  

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## 2 answers

### Answer by username_4 on 2022-10-08. Score: 3 | Accepted answer

From an intuitive point of view, convexity of preferences can be interpreted as a 'taste for diversification', that is a consumer prefers (at least weakly) bundles more 'balanced ' with respect to the quantity of each good to 'unbalanced' bundles, heavily weighted toward one commodity.

From Mas Colell, Green, Whinston, *Microeconomc Theory*, 1995, p. 44:

> Convexity can also be viewed as the formal expression of a basic
> inclination of economic agents for diversification. Indeed, under
> convexity, if $x$ is indifferent to $y$ , then $\frac{1} {2}
> x+\frac{1} {2} y$, the half mixture of $x$ and $y$, cannot be worse
> than either $x$ and $y$. [...] A taste for diversification is a
> realistic trait of economic life.

Therefore, for a monopolist, it could be convenient to produce two differentiated products, instead of only one.

> **Comments:**
> **username_3**: Hi! You quote a plausible argument, but could you please support the existence of convex preferences with empirical references?  
> **username_4**: Hi Giskard! No. I tried to give an intuitive grasp of the concept of convexity of preferences,  beyond formalization, as I thought the OP asked for, to understand, for instance, the logic of the behavior of a monopolist. I can’t quote experimental researches about actual existence of convex preferences.  

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### Answer by username_2 on 2022-10-08. Score: 3

Convex preferences simply exist. They are a fundamental innate feature of consumers and exist independently of markets. (Some) people can have convex preferences even in a centralized communist economy without markets. They just have these preferences.

For example, in microeconomics you could say preferences are just as fundamental as a person’s eye color, which exists regardless of circumstances.

> **Comments:**
> **username_3**: If your claim is more than "the existence of convex preferences is an assumption" can you please support it with some (empirical) references?  

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