Course Syllabus

Course Information

MAS 6V05.002- PhD Seminar: Special Topics in Marketing

Thursday 2:30 am – 5:15 pm, SOM 2.802, Fall 2009

Professor Contact Information

Instructor: Prof. Ashutosh Prasad TA: TBA

Tel: (972) 883-2027 Tel. (972) 883-XXXX
E-mail: aprasad@utdallas.edu E-mail: TBA
Office: SOM 3.221 Office: SOM 3.618
Office Hours: W 4:30 - 7:30pm; or by appointment Office hours TBA

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 course should have been taken.

Course Description

The purpose of the course is to provide Ph.D. candidates interested in academic or industry careers with
an integrated and in-depth understanding of pricing decisions. Pricing is the element of the marketing mix
that determines revenues and profits. However, even large firms frequently price suboptimally. We will
examine microeconomic, strategic and psychological considerations in determining the correct pricing for
products and services. We will cover price-setting techniques in various monopoly and competitive
situations. There are many different pricing strategies – competitive pricing, bundling, versioning etc. -
that will be covered together with a discussion of the circumstances under which to use them. The
methodology will be mostly analytical with a few empirical pieces. The course will use a combination of
lectures, discussions and exercises. The discussions and writing component of the course will help students
in knowing the latest research in pricing models, selection of interesting research topics, appreciation of
excellence in research, and evaluation, constructive criticism and presentation of research.

Student Learning Objectives/Outcomes

- Students will obtain a detailed understanding of pricing theory and practices

- Students will complete a publishable quality term paper
- Student will learn to incorporate quantitative methodologies to solving marketing problems
- Student will improve their presentation skills

Course Syllabus Page 1

Required Textbooks and Materials

Material consists of published research papers and book chapters. 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. Topics in Microeconomics by E. Wolfstetter, Cambridge 1999.
5. The Theory of Industrial Organization by J. Tirole, MIT 1988.

Assignments & Academic Calendar

Date Topics

Session 1 INTRODUCTION
Thu, Aug 20
1. Rao & Kartono (2009). Pricing Objectives and Strategies. In V.Rao
(Ed.) Handbook of Pricing Research in Marketing.
2. Jedidi and Jagpal (2009). Willingness to pay: Measurement and
Managerial Implications. In V.Rao (Ed.) Handbook of Pricing
Research in Marketing.
3. Prasad (2009). Demand Elasticity. Working paper, UT Dallas.

Session 2 MONOPOLY & COMPETITION

Thu, Aug 27
1. Wolfstetter (1999). Ch. 1 Monopoly. In Topics in Microeconomics.
2. Balasubramanian (1998). Mail versus mall: A strategic analysis of
competition between direct marketers and conventional retailers. Mkt.
Sc. 17(3).
3. Bass, Haruvy & Prasad (2006) Variable Pricing Strategies in Oligopoly
Markets. Jr. of Business 79(6), 2789-2809.

Session 3 PRICE PROMOTIONS

Thu, Sep 3
1. Narasimhan (1988). Competitive Promotional Strategies. Jr. of
Business 61(4), 427-449.
2. Rao, Arjunji and Murthi (1995). Game theory and empirical
generalizations concerning competitive promotions. Mkt. Sc. 14(3),
G89-G100.
3. Varian (1980). A model of sales. AER 70, 651-659.

Course Syllabus Page 2

 PRICE DISPERSION
Session 4
Thu, Sep 10 1. Rao and Syam (2001). Equilibrium price communication and
unadvertised specials by competing supermarkets. Mkt.Sc. 20(1).
2. Baye and Morgan (2001). Information gatekeepers on the Internet
and the competitiveness of homogeneous product markets. AER
91(3), 454-474.
3. Lal and Sarvary (1999). When and how is the Internet likely to
decrease price competition? Mkt. Sc. 18(4), 485-503.

Session 5 PRODUCT-LINE PRICING

Thu, Sep 17
1. Deneckere and McAfee (1996). Damaged goods. JEMS 5, 149-174.
Followup paper, McAfee (2006). Pricing damaged goods. Caltech
Working Paper.
2. Netessine & Taylor (2007). Product line Design and Production
Technology. Mkt.Sc. 26, 101-117.
3. Draganska & Jain (2005). Consumer Preferences and Product Line
Pricing Strategies Mkt.Sc. 25(2) 164-174.

Session 6
Thu, Sep 24 PRICING IN CHANNELS

1. Desai, Norris and Staelin (2005). The trade Promotion of Durable

Goods: Theory and Empirical Evidence. JMR.
2. Petruzzi and Dada (1999). Pricing and the newsvendor problem. OR
47(2), 183-194.
3. Kumar, Rajiv & Jeuland (2001). Effectiveness of Trade Promotions…
Mkt. Sc. 20 382-404.

Session 7 ASSORTED TOPICS

Thu, Oct 1
1. Xie & Fay (2008). Probabilistic Goods: A Creative way of selling
Products and Services. Mkt. Sc. Forthcoming.
2. Moorthy & Winter 2006. Price-Matching Guarantees. RAND Jr.
Econ. 37(2), 449-465.
3. Biyalogorsky, Gerstner (2004). Contingent Pricing to Reduce Price
Risks. Mkt.Sc.

Session 8 ASSORTED TOPICS

Thu, Oct 8 1. Rochet & Tirole (2006). Two-Sided Markets: A Progress Report
RAND Jr. Econ. 37(3), 645-667
2. Prasad, Mahajan and Bronnenberg (2003). Advertising versus pay-
per-view in electronic media. IJRM 20(1), 13-30.
3. Danaher (2002) Optimal Pricing of New Subscription Services. Mkt.
Sc. 21(2) 119-138.

Submit Draft of Book Chapter

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 DYNAMIC PRICING
Session 9
Thu, Oct 15 1. Bayus (1992). The dynamic pricing of next generation consumer
durables. Mkt. Sc. 11(3), 251-65
2. Elmaghraby and Keskinocak (2003). Dynamic pricing: Research,
overview, current practices, future directions. Mgt.Sc.
3. Bergemann & Valimaki (2006). Dynamic Pricing of New Experience
Goods. JPE 114(4), 713-743.
4. Nair (2007) Intertemporal Price Discrimination with Forward
Looking Consumers. QME 5(3), 239-252.

Session 10 INFORMATION
Thu, Oct 22 1. Raju & 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. Wang et al. (2008) When Auction meets Fixed Price… QME 6(4),
339-370.

Submit Draft of Project Report

Session 11 ASSORTED TOPICS

Thu, Oct 29
1. Klemperer (1987). The Competitiveness of Markets with Switching
Costs. Rand Jr. Econ. 18(1) 138-150.
2. McCabe (2002). Journal Pricing and Mergers: A Portfolio Approach.
AER.
3. Xie and Shugan (2004). Advance selling for services. California
Management Review 46(3), 37-55.

Session 12 BEHAVIORAL PRICING

Thu, Nov 5
1. Shy (2008) Tariff-choice Biases and Warranties. Ch. 11 in How to
Price.
2. Majumdar, Raj & 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.

Session 13 BEHAVIORAL PRICING…

Thu, Nov 12
1. Soman & Gourville (2001). Transaction Decoupling: How Price
Bundling Affects the Decision to Consume. JMR 38(1) 30-44.
2. Ellison (2003). A Model of Add-on Pricing. NBER Working Paper
#9721.
3. Ellison (2006) Bounded rationality in Industrial Organization.
Available at www.cemmap.ac.uk/papers/vol2_chap5.pdf

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Session 14 Project Presentations
Thu, Nov 19

Session 15 Submit Project Report and Book Chapter

Thu, Dec 3 Project Presentations

Grading Policy

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

Grade scale: A (85%+), B (75%+ to 85%), C (65%+ to 75%), F (<65%). Any grade dispute
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 will be expected 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.

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

The term paper will be evaluated on its completeness and quality. If the paper is assessed as
having potential to be published in an A (respectively, B or C) journal it will get a grade of A
(30%) (respectively, B (20%) or C (10%)). 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. Term paper presentation
of about 30 minutes each will be in the last weeks of class.

Book Chapter
This is really a literature review, but you can consider putting 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. As an example of the writing style, see review papers in a

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 leading journal or an edited volume. However, 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 (or
may not) 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.)

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 university’s 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).

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 one’s own work or
material that is not one’s 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 university’s 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.

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

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 encourages all official student email correspondence be sent only to a student’s 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 university’s 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
respondent’s 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 Dean’s 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 semester’s 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 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.

Disability Services

The goal of Disability Services is to provide students with disabilities educational opportunities
equal to those of their non-disabled peers. Disability Services is located in room 1.610 in the
Student Union. Office hours are Monday and Thursday, 8:30 a.m. to 6:30 p.m.; Tuesday and
Wednesday, 8:30 a.m. to 7:30 p.m.; and Friday, 8:30 a.m. to 5:30 p.m.
The contact information for the Office of Disability Services is:
The University of Texas at Dallas, SU 22

Course Syllabus Page 7

 PO Box 830688
Richardson, Texas 75083-0688
(972) 883-2098 (voice or TTY)

Essentially, the law requires that colleges and universities make those reasonable adjustments
necessary to eliminate discrimination on the basis of disability. For example, it may be necessary
to remove classroom prohibitions against tape recorders or animals (in the case of dog guides) for
students who are blind. Occasionally an assignment requirement may be substituted (for example,
a research paper versus an oral presentation for a student who is hearing impaired). Classes
enrolled students with mobility impairments may have to be rescheduled in accessible facilities.
The college or university may need to provide special services such as registration, note-taking, or
mobility assistance.

It is the student’s responsibility to notify his or her professors of the need for such an
accommodation. Disability Services provides students with letters to present to faculty members
to verify that the student has a disability and needs accommodations. Individuals requiring special
accommodation should contact the professor after class or during office hours.

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.

Course Syllabus Page 8