In many markets, firms increase product complexity through add-on features, which can make the evaluation and comparison of products difficult, and thus increase buyers’ search cost. Does this product obfuscation limit buyers’ search behavior and induce them to buy overpriced products? And if so, why does competition not eliminate obfuscated products? We show – based on competitive experimental markets with surplus-enhancing obfuscation opportunities – that obfuscation via product complexity severely constrains the depth and breadth of buyers’ search. Sellers anticipate and take advantage of this by hiding unattractive product features and selling add-ons persistently above marginal cost. Even the most favorably priced product in the market is offered above marginal cost, and buyers persistently fail to find the best product such that inferior products have a good chance of being bought, leading to enduring price dispersion. Surplus-enhancing obfuscation opportunities are the causal driver of persistent profits and price dispersion because if we remove these opportunities, overall prices quickly converge to marginal cost. However, if add-ons merely complicate the products without generating additional surplus, obfuscation via product complexity becomes quite fragile because buyers display an aversion against complex products.