Aligning benefits with payments: A test of the pattern alignment hypothesis

Abstract This article examines consumer perception of transactions whose benefits of consumption and cost of purchase unfold over time. Specifically, the article employs the notion of narrow framing to suggest that, when consumers confront a series of decisions, they tend to make evaluations one at a time, rather than take into consideration the entire portfolio. Consistent with this argument, the authors test the pattern alignment hypothesis, which states that consumers prefer payment schemes that match the pattern of benefits and payments in each period, rather than a scheme that encompasses an entire financing period. In two experiments, the authors find general support for the pattern alignment hypothesis and for the underlying process by which this hypothesis occurs. Specifically, Experiment 2 highlights the mediating role of consumers' perceived fairness in determining the effectiveness of a financing program. The paper concludes with a discussion of the theoretical and practical implications of developing financing and pricing strategies that promote the perception of fairness.