overbundling

Overbundling is the practice of offering goods or services in a bundle that is larger, more complex, or more inclusive than what most consumers want or need. The term is used in economics and business to describe bundles that extend beyond efficient, targeted grouping.

By combining many items, firms may attempt to extract more consumer surplus, deter switching, and raise average prices. Overbundling can reduce price transparency, making it harder for buyers to compare the value of the bundle with the stand-alone offerings.

Contexts include telecommunications and media, software suites, and consumer electronics, where regulators and researchers examine whether bundles obscure marginal value, create lock-in, or suppress competition. In some cases, bundling can improve efficiency if it reflects complementary demand; overbundling emphasizes the risk when consumers face unnecessary features or bundled costs.

Measurement is context-dependent and can be difficult. Indicators include large gaps between bundled and component prices, mandatory add-ons that have little use, opaque pricing, and limited modular choices. Antitrust and consumer protection authorities may scrutinize tied or exploitative bundling practices.

Overall, overbundling describes a bundling strategy perceived as excessive relative to consumer demands, with potential effects on welfare, price competition, and market dynamics.