My father, who is also is an economics prof, pointed out the other day I made an error in describing externalities. In cases like TV commercials or pop-ads, these are bundled goods. Externalities are when someone not involved in the transaction is impacted, but the person watching the ads decided to watch TV or visit the website so they get the ads and the content.
Often bundled goods are obvious (a combo meal, free sugar/cream with coffee, a set of matching gloves and scarf). But, I was wondering the age old question “why are batteries not included?” in something that needs batteries. I was thinking this as I went to purchase a printer cable for my new printer. If I need a cable to use the printer (I think?), why not sell me a cable too. I was surprised Dell, where I bought the printer, did not even offer me one.
I think it is not included, because Dell wants to make the printer seem cheaper than it is (the cable cost about ½ the price of the printer). Dell has been taken to task in the UK, for this false advertising on this issue (link). However, “Dell argued that it does not supply cables as standard with printers on the assumption that many customers would have one already.”
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