Three-Card Monte With the Invisible Hand

The Freakonomics blog over at the New York Times is amused right now by the discovery of a coffee shop that is offering a large iced coffee for a discount price of $1.49, right next to a medium iced coffee for a regular price of $1.49. “Readers, what kind of consumer might order the medium instead of the large?” they ask. (Actually, I might; a whole large coffee makes me jumpier than I want.)

Once they’re fortified by their free extra inch of coffee, the popular economists could try ordering up some home info-utility services for a new apartment. In two days of trying to be a rational customer, with three service providers to choose among—call them [OLDER, EX-MONOPOLISTIC CABLE COMPANY], [NEWER, ALTERNATIVE CABLE COMPANY], and [PHONE COMPANY], though all three offer TV, Internet, and phone—these are some things I have learned:

[PHONE COMPANY] charges more for a bare-bones analog phone line than for a bundled unlimited-calling digital phone line.

[NEWER, ALTERNATIVE CABLE COMPANY] charges more for a bundle of TV and Internet than it charges for TV and Internet separately.

[OLDER, EX-MONOPOLISTIC CABLE COMPANY] charges more than everyone else, for everything, but it charges more for a two-part bundle of TV and the Internet than it charges for a three-part bundle of TV, Internet, and phone service. 

Also [PHONE COMPANY] reserves the right to jack up rates by $25 after two years. 

It is almost as if, rather than providing people with clear information to allow them to develop preferences, the American consumer marketplace were fundamentally designed to bamboozle, mislead, upsell, and otherwise prevent customers from shopping for what they want or comparing one product to another.