Todd Kendall wishes to know

…why is it that in every Mexican (or at least, every Tex-Mex) restaurant, there are always 10-20 "combination plates" that each match three seemingly random food items?  Trying to buy the items a la carte involves a substantially higher total price than buying the combo plate.

We all know that bundling can be an effective form of price discrimination but I wonder if that is the case here.  Most of these dishes are just different forms of slop.  Can it really be that someone loves the quesadillas but not the burritos, or vice versa, and that restaurants can capture more consumer surplus by forcing the two to be consumed together?  I am skeptical.  More likely behavioral economics is at work.  Most buyers don’t even know the differences between all these fine Mexican culinary art forms, especially as practiced in the United States.  But if they’re getting three different kinds of dishes, well, surely they can assume they will be getting something they want.  Slop or no slop.  There is diversification and a feeling that the restaurant’s best dish will not be left unsampled.

One implicit prediction is that the very best Mexican restaurants in America will not resort to this kind of subterfuge and indeed they don’t.

Do you have any alternative hypotheses?


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