Aligning Benefits with Payments in a Consumer Financing Context : A Test of the Pattern Alignment Hypothesis

This article extends the literature on consumer financing decisions by drawing on mental accounting and prospect theory. Specifically, the authors employ 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 taking the entire portfolio into consideration. Consistent with this argument, the authors test a pattern alignment hypothesis, which states that consumers prefer financing schemes that match the pattern of benefits and payments in each period rather than throughout the financing period. In three studies, the authors find general support for the pattern alignment hypothesis, then discuss some theoretical and practical implications