In 2011, The New Yorker reported that some 80 percent of AOL’s profit came from subscriptions, many of which were paid by dial-up customers. Dial-up. Remember that? Many of these “subscribers” may not, either. Tim Armstrong, AOL’s chief executive, said last year that two-thirds of subscribers paid for dial-up in their service packages but didn’t use it. They presumably have broadband access, which they buy from another company. While these customers can use other AOL features included in their subscriptions, like computer checkups and customer service, it seems likely that many people continue to pay for an AOL subscription because of the power of automatic billing.

Rebates are another kind of snag. While traditional economic thinking cites rebates as a way for companies to offer discounts to the thrifty, they actually help the bottom line for another reason. Studies suggest that roughly half of all rebates go unredeemed. And one study found that most nonredeemers — 63.5 percent — intended to redeem but never got around to it. People buy a product thinking that they will benefit from a discount, yet they never actually seek or receive it.

These snags seem to contradict the simple logic about competition found in economics textbooks. Competition should create products and services that maximize total surplus — the benefits we get after accounting for the cost of producing them. Snags, on the other hand, do not create value, only annoyance, so competitive forces should remove them. In principle, a snag-free company would get all the business and cause the others to go under (or at least out of the snag business).

Obviously, this doesn’t happen. But we can’t chalk this up to the simple assumption that markets don’t work. We see that in many ways, they do: Competition is why it is so easy to sign up for cable; it is also why my Internet speeds creep up every year, as each provider tries to outdo the others. The deeper question, rather, is this: When does competition benefit consumers and when does it create snags?