Financial Implications of Consumer Preferences and Market Dynamics in ESG Product Markets

Abstract

This thesis examines the financial implications of consumer preferences and market dynamics in ESG product markets, focusing on the fashion industry. It combines an online discrete choice experiment with a two-stage modeling framework. The results reveal that stated preferences overestimate actual ESG purchasing behavior, creating demand-side uncertainty. These findings are incorporated into a Bertrand duopoly model and an evolutionary framework, showing that ESG profitability depends on market conditions, price sensitivity, and behavioral commitment to ESG-attributes. Overall, ESG market viability is conditional, with uncertainty significantly affecting long-term outcomes.