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

Sei Auh, Eric Shih, Yeosun Yoon

Research output: Contribution to journalArticle

6 Citations (Scopus)

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.

Original languageEnglish (US)
Pages (from-to)292-303
Number of pages12
JournalJournal of Consumer Psychology
Volume18
Issue number4
DOIs
StatePublished - Oct 2008
Externally publishedYes

Fingerprint

Cost-Benefit Analysis
Costs and Cost Analysis
Payment
Alignment
Financing
Experiment
Consumer perceptions
Purchase
Evaluation
Costs
Fairness
Perceived fairness
Pricing strategy
Financing strategy

ASJC Scopus subject areas

  • Applied Psychology
  • Marketing

Cite this

Aligning benefits with payments : A test of the pattern alignment hypothesis. / Auh, Sei; Shih, Eric; Yoon, Yeosun.

In: Journal of Consumer Psychology, Vol. 18, No. 4, 10.2008, p. 292-303.

Research output: Contribution to journalArticle

@article{686430b6017948bebc9036ede215a61c,
title = "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.",
author = "Sei Auh and Eric Shih and Yeosun Yoon",
year = "2008",
month = "10",
doi = "10.1016/j.jcps.2008.09.007",
language = "English (US)",
volume = "18",
pages = "292--303",
journal = "Journal of Consumer Psychology",
issn = "1057-7408",
publisher = "Elsevier Inc.",
number = "4",

}

TY - JOUR

T1 - Aligning benefits with payments

T2 - A test of the pattern alignment hypothesis

AU - Auh, Sei

AU - Shih, Eric

AU - Yoon, Yeosun

PY - 2008/10

Y1 - 2008/10

N2 - 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.

AB - 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.

UR - http://www.scopus.com/inward/record.url?scp=56149102870&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=56149102870&partnerID=8YFLogxK

U2 - 10.1016/j.jcps.2008.09.007

DO - 10.1016/j.jcps.2008.09.007

M3 - Article

AN - SCOPUS:56149102870

VL - 18

SP - 292

EP - 303

JO - Journal of Consumer Psychology

JF - Journal of Consumer Psychology

SN - 1057-7408

IS - 4

ER -