Course Syllabus

Course Information MAS 6V05.002- PhD Seminar: Special Topics in Marketing Tuesday 4:00 pm 6:45 pm, SOM 2.804, Fall 2011

Professor Contact Information

Instructor: Prof. Ashutosh Prasad Tel: (972) 883-2027 E-mail: aprasad@utdallas.edu Office: SOM 3.221 Office Hours: Thursday 2-5 pm or by appointment

TA: Tel. E-mail: Office: Office hours

FYI, please use the above and not eLearning for sending us email.

Course Pre-requisites, Co-requisites, and/or Other Restrictions Ph.D. status or permission of the instructor. Ideally, the Microeconomics, Game Theory, or Industrial Organization courses should have been taken.

Course Description The purpose of this course is to discuss interesting topics and advanced techniques in pricing research. It is targeted towards Ph.D. students who are interested in academic or industry careers. Pricing is the element of the marketing mix that determines revenues. But even large firms frequently price suboptimally. We will examine microeconomic, strategic and psychological considerations in determining the correct pricing of products and services. Price discrimination, advance selling, bundling, versioning etc. are covered under monopoly and competitive settings. The methodology is primarily analytical modeling. The course consists of lectures, paper discussions, exercises and a high quality term paper. Selection of research topics, crafting publishable papers, and presentation of research are also discussed.

Course Syllabus

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Student Learning Objectives/Outcomes - Students will obtain a detailed understanding of pricing theory and practices. Assessed by class discussions. - Students will complete a publishable quality term paper. Assessed by term paper. - Student will learn to incorporate quantitative methodologies to solving marketing problems. Assessed by term paper. - Student will improve their presentation skills. Assessed by term paper presentation.

Required Textbooks and Materials Material consists of published research papers. Most of the assigned papers are available full-text online from the UTD library web page or JSTOR (www.jstor.org). There is no required textbook. Suggested Course Materials Optional books that can be used for background reading are: 1. Handbook of Pricing Research in Marketing by V. Rao, EEPL 2009 2. How to Price by O. Shy, Cambridge 2008 3. The Theory and Practice of Revenue Management by K. Talluri and G. Van Ryzin, Kluwer 2004. 4. The Theory of Industrial Organization by J. Tirole, MIT 1988. Content Management System The university provides eLearning for secure communication of grades. We will use it for the grade book and discussion functionality.

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Assignments & Academic Calendar Date Session 1 Tue, Aug 30 Topics

1. Rao & Kartono (2009). Pricing objectives and strategies. In V.Rao (Ed.) Handbook of Pricing Research in Marketing. 2. Miller et al. (2011). How should consumers willingness to pay be measured? Journal of Marketing Research (Feb.), 172184. 3. Wolfstetter (1999). Oligopoly and IO. Portion of Ch. 3 of Topics in Microeconomics. Cambridge.

Session 2 Tue, Sep 6

1. Horizontal and vertical differentiation Tirole (1988, p.277285; p.296-297). 2. Balasubramanian (1998). Mail versus mall: A strategic analysis of competition between direct marketers and conventional retailers. Mkt. Sc. 17(3), 181-195. 3. Bass, Haruvy & Prasad (2006) Variable pricing strategies in oligopoly markets. Jr. of Business 79(6), 2789-2809.

Session 3 Tue, Sep 13

1. Graddy (2006) Fulton fish market. Jr. Econ. Perspectives 20(2), 207-220. 2. McAfee (2007). Price Dispersion. Ch.5. Lectures on Pricing. 3. Price discrimination and Two part tariffs. 4. Rao, Arjunji and Murthi (1995). Game theory and empirical generalizations concerning competitive promotions. Mkt. Sc. 14(3), G89-G100.

Session 4 Tue, Sep 20

1. Talluri and Van Ryzin (2004). Auctions. Portion of Ch. 6 in Revenue Management. Kluwer. 2. Beggs and Graddy (2009): Anchoring effects: Evidence from art auctions. AER 99(3), 1027-1039. 3. Elmaghraby (2004). Auctions and pricing in e-marketplaces. Portion of Ch.6 in Handbook of Quant. Supply Chain Analysis. Kluwer.

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Session 5 Tue, Sep 27

1. Narasimhan (1988). Competitive promotional strategies. Jr. of Business 61(4), 427-449. 2. Varian (1980). A model of sales. AER 70, 651-659. 3. Rao and Syam (2001). Equilibrium price communication and unadvertised specials by competing supermarkets. Mkt.Sc. 20(1), 61-81.

Session 6 Tue, Oct 4

1. Desai, Norris and Staelin (2005). The trade promotion of durable goods: Theory and empirical evidence. JMR 42(1), 54-66. 2. Petruzzi and Dada (1999). Pricing and the newsvendor problem. OR 47(2), 183-194. 3. Kumar, Rajiv and Jeuland (2001). Effectiveness of trade promotions Mkt. Sc. 20, 382-404.

Session 7 Tue, Oct 11

1. Deneckere and McAfee (1996). Damaged goods. JEMS 5, 149174. 2. Xie and Fay (2008). Probabilistic goods: A creative way of selling products and services. Mkt. Sc 27(4), 674-690. 3. Biyalogorsky and Gerstner (2004). Contingent pricing to reduce price risks. Mkt.Sc. 23(1), 146-155.

Session 8 Tue, Oct 18

1. Xie and Shugan (2004). Advance selling for services. California Management Review 46(3), 37-55. 2. Sainam et al. (2010) Consumer options: Theory and an empirical application to a sports market. Journal of Marketing Research (June), 401-414. 3. Lambrecht et al. (2007) Does uncertainty matter? Consumer behaviour under three-part tariffs. Mkt.Sc. 26(5), 698-710. Submit Draft of Book Chapter

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Session 9 Tue, Oct 25

1. Elickson, Misra, Nair (2011). Repositioning dynamics and pricing strategy. JMR, forthcoming. 2. Elmaghraby and Keskinocak (2003). Dynamic pricing: Research, overview, current practices, future directions. Mgt.Sc. 49(10), 1287-1309. 3. Soysal and Krishnamurthi (2009) Dynamics of demand in seasonal goods industries. UT Dallas.

Session 10 Tue, Nov 1

1. Raju and Roy (2000) Market information and firm performance. Mgt. Sc. 46(8), 1075-1084. 2. Sarvary and Parker (1997). Marketing information: A competitive analysis. Mkt. Sc. 16(1). 3. Bergemann and Valimaki (2006). Bandit problems. http://ethesis.helsinki.fi/julkaisut/eri/hecer/disc/93/banditpr .pdf Submit Draft of Project Report

Session 11 Tue, Nov 8

1. Iyengar, Jedidi and Kohli (2008). A conjoint approach to multi-part pricing. JMR 195-210. 2. Eisenmann et al. (2006). Strategies for two-sided markets. HBR. 3. Danaher (2002) Optimal pricing of new subscription services. Mkt. Sc. 21(2) 119-138.

Session 12 Tue, Nov 15

1. Soman and Gourville (2001). Transaction decoupling: How price bundling affects the decision to consume. JMR 38(1) 3044. 2. Prasad et al. (2010). Optimal bundling of technological products with network externality. Mgt. Sc. 56(12), 22242236. 3. Koschat and Putsis (2002). Audience characteristics and bundling JMR 39(2), 262-273.

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Session 13 Tue, Nov 22

1. Shy (2008). Tariff-choice biases and warranties. Portion of Ch. 11 in How to Price. Cambridge. 2. Majumdar, Raj and Sinha (2005). Reference price research: Review and propositions. JM 69(4), 84-102. 3. Thaler (1985). Mental accounting and consumer choice. Mkt. Sc. 4(3), 199-214. 4. Ellison (2006). Bounded rationality in Industrial Organization. Available at www.cemmap.ac.uk/papers/vol2_chap5.pdf

Session 14 Tue, Nov 29 Session 15 Tue, Dec 6

Project Presentations

Submit Project Report and Book Chapter Project Presentations

Grading Policy Activity Term paper & Present (30%+10%) Term paper draft Book chapter Book chapter draft Discussion Leader Attendance & CP Total Score 40% 5% 20% 5% 20% 10% 100%

Grade disputes should be submitted in writing within one week of the assignment of the grade. Assignments are due at the beginning of class. Late submissions will not be accepted.

Course & Instructor Policies Attendance and Participation Students are expected to attend all sessions and to have read and reflected on the material to be covered in class. Students should try to understand the material being discussed, ask questions, critique the research and propose extensions. Three absences are allowed without penalty. Thereafter, subtract two points for each absence.

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Discussion Leader You will lead the discussion on one or more assigned papers during the course of the semester. The initial presentation should last about 15 minutes. It should include a brief overview of the problem under study, details of the paper (theory, methodology, variables, positioning, data and results), basic modeling idea, analyze the strengths/weakness of the approach and conclude with a discussion of possible extensions. Term Paper and Presentation Students will undertake to write a paper of publishable quality. To prevent a great deal of time being spent on searching for a problem and a literature review, please adopt one paper in the list of readings as your baseline paper and attempt to extend it as your term paper. The baseline paper should be selected by the second week of class and communicated to the instructor. The term paper will be evaluated on its potential, completeness and quality. Term paper presentation will be of about 30 minutes each. Book Chapter This is really a literature review, but we can consider collecting them all together like a book online. Please pick a topic of your choice and discuss the main results and main papers in that topic area in a thorough and structured manner. The style should be slightly more pedagogical than a review paper and there should be at least three relevant modeling problems solved as boxed examples in the chapter. Tables comparing the different papers and results and figures showing the conceptual relationships are desirable, and presentation may be aided by screenshots of software like Maxima. The beginning should have a couple of motivating examples and towards the end should discuss areas for further study. Please decide the topic of the chapter by the second week of class. (It is very acceptable to pick an area that would relate to your term project.)

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Student Conduct & Discipline The University of Texas System and The University of Texas at Dallas have rules and regulations for the orderly and efficient conduct of their business. It is the responsibility of each student and each student organization to be knowledgeable about the rules and regulations which govern student conduct and activities. General information on student conduct and discipline is contained in the UTD publication, A to Z Guide, which is provided to all registered students each academic year. The University of Texas at Dallas administers student discipline within the procedures of recognized and established due process. Procedures are defined and described in the Rules and Regulations, Series 50000, Board of Regents, The University of Texas System, and in Title V, Rules on Student Services and Activities of the universitys Handbook of Operating Procedures. Copies of these rules and regulations are available to students in the Office of the Dean of Students, where staff members are available to assist students in interpreting the rules and regulations (SU 1.602, 972/883-6391) and online at http://www.utdallas.edu/judicialaffairs /UTDJudicialAffairs-HOPV.html. A student at the university neither loses the rights nor escapes the responsibilities of citizenship. He or she is expected to obey federal, state, and local laws as well as the Regents Rules, university regulations, and administrative rules. Students are subject to discipline for violating the standards of conduct whether such conduct takes place on or off campus, or whether civil or criminal penalties are also imposed for such conduct. Academic Integrity The faculty expects from its students a high level of responsibility and academic honesty. Because the value of an academic degree depends upon the absolute integrity of the work done by the student for that degree, it is imperative that a student demonstrate a high standard of individual honor in his or her scholastic work. Scholastic dishonesty includes, but is not limited to, statements, acts or omissions related to applications for enrollment or the award of a degree, and/or the submission as ones own work or material that is not ones own. As a general rule, scholastic dishonesty involves one of the following acts: cheating, plagiarism, collusion and/or falsifying academic records. Students suspected of academic dishonesty are subject to disciplinary proceedings. Plagiarism, especially from the web, from portions of papers for other classes, and from any other source is unacceptable and will be dealt with under the universitys policy on plagiarism (see general catalog for details). This course will use the resources of turnitin.com, which searches the web for possible plagiarism and is over 90% effective. Copyright Notice The copyright law of the United States (Title 17, United States Code) governs the making of photocopies or other reproductions of copyrighted materials, including music and software. Copying, displaying, reproducing, or distributing copyrighted works may infringe the copyright owners rights and such infringement is subject to appropriate disciplinary action as well as criminal penalties provided by federal law. Usage of such material is only appropriate when that usage constitutes fair use under the Copyright Act. As a UT Dallas student, you are required to follow the institutions copyright policy (Policy Memorandum 84-I.3-46). For more information about fair use, see http://www.utsystem.edu/ogc/intellectualproperty/copypol2.htm

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Email Use The University of Texas at Dallas recognizes the value and efficiency of communication between faculty/staff and students through electronic mail. At the same time, email raises some issues concerning security and the identity of each individual in an email exchange. The university encourages all official student email correspondence be sent only to a students U.T. Dallas email address and that faculty and staff consider email from students official only if it originates from a UTD student account. This allows the university to maintain a high degree of confidence in the identity of all individual corresponding and the security of the transmitted information. UTD furnishes each student with a free email account that is to be used in all communication with university personnel. The Department of Information Resources at U.T. Dallas provides a method for students to have their U.T. Dallas mail forwarded to other accounts. Withdrawal from Class The administration of this institution has set deadlines for withdrawal of any college-level courses. These dates and times are published in that semester's course catalog. Administration procedures must be followed. It is the student's responsibility to handle withdrawal requirements from any class. In other words, I cannot drop or withdraw any student. You must do the proper paperwork to ensure that you will not receive a final grade of "F" in a course if you choose not to attend the class once you are enrolled. Student Grievance Procedures Procedures for student grievances are found in Title V, Rules on Student Services and Activities, of the universitys Handbook of Operating Procedures. In attempting to resolve any student grievance regarding grades, evaluations, or other fulfillments of academic responsibility, it is the obligation of the student first to make a serious effort to resolve the matter with the instructor, supervisor, administrator, or committee with whom the grievance originates (hereafter called the respondent). Individual faculty members retain primary responsibility for assigning grades and evaluations. If the matter cannot be resolved at that level, the grievance must be submitted in writing to the respondent with a copy of the respondents School Dean. If the matter is not resolved by the written response provided by the respondent, the student may submit a written appeal to the School Dean. If the grievance is not resolved by the School Deans decision, the student may make a written appeal to the Dean of Graduate or Undergraduate Education, and the deal will appoint and convene an Academic Appeals Panel. The decision of the Academic Appeals Panel is final. The results of the academic appeals process will be distributed to all involved parties. Copies of these rules and regulations are available to students in the Office of the Dean of Students, where staff members are available to assist students in interpreting the rules and regulations. Incomplete Grade Policy As per university policy, incomplete grades will be granted only for work unavoidably missed at the semesters end and only if 70% of the course work has been completed. An incomplete grade must be resolved within eight (8) weeks from the first day of the subsequent long

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semester. If the required work to complete the course and to remove the incomplete grade is not submitted by the specified deadline, the incomplete grade is changed automatically to a grade of F. Student AccessAbility Services The goal of Student AccessAbility Services is to provide students with disabilities equal educational opportunities. Student AccessAbility Services provides students with a documented letter to present to the faculty members to verify that the student has a disability and needs accommodations. This letter should be presented to the instructor in each course at the beginning of the semester and accommodations needed should be discussed at that time. It is the students responsibility to notify his or her professors of the need for accommodation. If accommodations are granted for testing accommodations, the student should remind the instructor five days before the exam of any testing accommodations that will be needed. Student AccessAbility Services is located in the Student Services Building, room 3.200. Office hours are Monday Thursday, 8:30 a.m. to 6:30 p.m., and Friday 8:30 a.m. to 5:00 p.m. You may reach Student AccessAbility Services at (972) 883-2098. Guidelines for documentation are located on the Student AccessAbility Services website at http://www.utdallas.edu/studentaccess/documentation/ Religious Holy Days The University of Texas at Dallas will excuse a student from class or other required activities for the travel to and observance of a religious holy day for a religion whose places of worship are exempt from property tax under Section 11.20, Tax Code, Texas Code Annotated. The student is encouraged to notify the instructor or activity sponsor as soon as possible regarding the absence, preferably in advance of the assignment. The student, so excused, will be allowed to take the exam or complete the assignment within a reasonable time after the absence: a period equal to the length of the absence, up to a maximum of one week. A student who notifies the instructor and completes any missed exam or assignment may not be penalized for the absence. A student who fails to complete the exam or assignment within the prescribed period may receive a failing grade for that exam or assignment. If a student or an instructor disagrees about the nature of the absence [i.e., for the purpose of observing a religious holy day] or if there is similar disagreement about whether the student has been given a reasonable time to complete any missed assignments or examinations, either the student or the instructor may request a ruling from the chief executive officer of the institution, or his or her designee. The chief executive officer or designee must take into account the legislative intent of TEC 51.911(b), and the student and instructor will abide by the decision of the chief executive officer or designee. These descriptions and timelines are subject to change at the discretion of the Professor.

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