Re: Bundling and operating systems

[Eric Lee Green <elgreen@iname.com>]

On Sat, 18 Dec 1999, you wrote:
> > The price of a specific instance of the product is increased to cover the cost.
> > But the price, ON AVERAGE, of the solution that consumers buy may actually
> > decrease, due to the decrease in packaging, manufacturing, marketing, and
> > distribution costs.  It depends upon how many consumers want the functionality
> > that is proposed to be bundled.
> 
> Sorry.  Harm is measured by the individual consumer not averaged.

I think this is the essential difference between law and economics. Economics
is concerned with the overall impact of actions. Law is concerned with the
effects of actions upon one specific person.

For example, VW USA has made the decision that all VW New Beetles sold here in
the United States shall be sold with air conditioning. Now, folks in Wisconsin
do not need air conditioning,.But the fact remains that the majority of
consumers want air conditioning in their car, and it was not economical for VW
USA to produce cars without air conditioning just for the Wisconsonites out
there.

Should Wisconsinites be able to sue VW USA for this bundling? After all, they
are clearly getting harmed... they could buy the car for $300 less if not for
the air conditioning! 

But from an economic point of view, it is more cost-effective, because the
average consumer gets his air conditioning for less, because it costs less to
put the air conditioning on at the factory than it would take for dealers to
install it separately (due to the fact that they have to remove the radiator
etc. to install air conditioning on un-air-conditioned cars).  The average
consumer saves approximately $200 due to this bundling. 

What I see you saying, Lewis, is that  if there are 9,999,999,999 people who
benefit from bundling, and 1 person who is harmed by bundling, this is an
actionable item even if the "harm" is just $10. I'm sorry, Lewis, but that's
the sort of reasoning that gives lawyers a bad name.

-- 
Eric Lee Green   e_l_green@hotmail.com
  http://members.tripod.com/e_l_green/