The Perils of Comparing Choices: Disparity in Valuation and Consumption

Individuals compare their choices when making decisions. However does comparison lead to better decisions? In this paper we explore the different effects of comparisons on valuation and consumption of information goods services of different usage limits. We defined three subjective usage limits. Achievable and unachievable usage limits are quantified but different because it is not realistic for an average consumer to consume to the unachievable usage limits. Unlimited usage limit is differentiated from the other two because it is unquantified. For valuation, the comparison of choices attenuates the gains associated with the packages. This results in higher valuation for packages with higher usage limits (unachievable and unlimited) when choices are compared. Consumption is motivated by the avoidance of wastage. Hence we observe that in the absence of comparisons, the consumption intention of the package with unlimited usage limit is lower than the package with unachievable usage limit as wastage is not a...