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I would be careful talking about revealed preferences here - individual customers have close to zero choice in the matter. They select from what's available on the market, not from the space of all possible software.



If the efficient market theory is to be believed, then as soon as a competitor shows up with the user's preferred choice, they will gain the market share.

The fact that no such competitor exists is evidence that the user's preferences aren't what you stated, but is in fact consistent with reality, namely they prefer free and bloated.


The mistake here is believing in efficient market theory.

It's not so easy for a competitor to show up, because they have to work against heavy first-mover advantage and network effects in software. Those who do a crap job get first to the market and set the trend (and the expectations). Moreover, there's a heavy component of tragedy of the commons here, with commons being users' computing resources - the software is often designed with implicit belief that it's the only thing running on user's machine. It's enough to make a sale, and you don't get a reward for making it so that your users can run many other stuff simultaneously with your application.




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