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a lot of my research deals with dynamic
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pricing and how consumers respond to
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prices and particularly we look at data
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from firms data from nonprofits to
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understand how we can adjust prices over
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time or zones over products and make the
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pricing policies palatable better for
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consumers improve consumer welfare and
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also make the form better and this is a
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tricky operational problem there is a
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marketing facet to it which is how
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people respond to this kind of price
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changes and price adjustments and a lot
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of my research has been trying to
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understand the interface of these two
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issues and trying to connect them
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we have a couple of papers that I will
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talk about one of the papers we look at
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data from a nonprofit enterprise this is
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one of the most reputed symphony
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orchestras in the country and the
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industry faces a lot of challenges it's
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a non-profit so one of our objectives is
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to make them healthier than they are
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right now and since they treat their
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patrons that's how they treat us
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consumers our patrons for them they are
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the source of their well-being and and
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therefore one of the things that we
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looked at is how you can start thinking
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about adjusting prices so that not only
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you do better revenue wise but also help
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get more consumers more patrons into the
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theater improve the experience that the
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consumers have in when they go to a
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concert so I go to a concert if it's 80%
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full I'm happy if it's 50% full even at
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the same prices I'm less happy so how do
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you improve consumer utility in terms of
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how they feel the perception that they
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have after the concert and how willing
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they are to go to the concert repeatedly
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based on the experience that they have
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so this was more of the focus that we
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had and we found out one of the things
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that really mattered was the history of
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prices where you start matters how do
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you move prices up or down matters and
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for which concerts you move down versus
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fist constants you move up this matters
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a lot where people are seated this
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matters so we have static pricing
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problem we have dynamic pricing problem
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we have product variety problem and all
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of these are very intricate operational
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problems that we have to solve together
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to make it better for the phone the
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second problem that we have been looking
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at is data from major league sports team
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in the United States which is a
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completely different context if you
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think about it here
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smarter popularity matters profits model
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the players well-being matters fans
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well-being matters but there are many
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many similarities again the issues that
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we found was static pricing very start
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how do you adjust prices this matters
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how do you price games how do you price
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games based on opponents can you fill
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the stadium can this improve welfare all
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of this ends up being very important at
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the end so to come back the collective
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focus of our problem is to understand
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how operations how marketing of pricing
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matters together and how we can improve
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both the firm and the consumer all
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a couple of things one of the things
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that is often discussed in um in the in
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the real world is how consumers respond
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to prices there's a lot of controversy
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about whether people find it favorable
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whether people hate it and and whether
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it's a right practice to do one of the
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things that we found out was that firms
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do want to understand this battle and
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they already have tools to do this
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battle and the worry is about perception
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of the consumers and what we found from
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our data is a lot of consumers do
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understand why firms have to adjust
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prices why firms have the increase or
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decrease prices based on popular
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concerts or less popular concerts for
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example they don't mind paying slightly
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higher prices if they had much better
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experience so it is always a question
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about how you can improve the experience
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from the product utility from the
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product and whether consumers are much
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better off even with a slight price
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increase and that's really something
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that drives a lot of our results so we
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found that interesting that consumers
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respond positively to price adjustments
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at the same time
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the worry is there and we have to do
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this carefully and calibrate it very
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well that's also important
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one of the things that uh that makes
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firms a little bit worried about getting
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jumping into dynamic programming dynamic
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pricing is to is the following buddy one
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they're always unsure whether consumer
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response to price adjustments are going
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to be extreme and therefore that makes
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it firms very of trying various things
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what has happened our in the recent
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years is with the help of mobile devices
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and experimental improvements and things
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like that we can do a lot of testing but
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it becomes very important in the
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following sense we cannot test forever
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we have to do a careful study of what
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kind of policies we can test for and
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much of the testing happens in sequence
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so one of the things that we found out
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was a firm that we looked at wanted to
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change its pricing policy this team and
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they were setting different price
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policies over time and as they were
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changing policies they had to also
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understand how consumers are responding
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to different policies and we were able
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to tease of them and tease out a
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methodology that can tell them hey this
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policy cost the consumers to come more
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often
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this policy changed how they choose
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between different seats the certain
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policy that we tested for based on the
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number of days out to the game changed
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how far ahead of the game or how close
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to the game they buy tickets so every
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policy we could test out what kind of
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changes it created in terms of how
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consumers bought products and that helps
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us to go back and say if a firm wants to
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focus on a particular question let's say
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I don't mind my revenues being flat but
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I want consumers to buy the same product
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maybe five days I can we do that and we
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can look at policies that we can explore
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so this being able to experiment test
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policies and being able to study and
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calibrate them helps us to understand
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what kind of behaviors what kind of
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changes we can we can do
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so classically if you think about an
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Operations research problem we would
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treat it as an optimization problem we
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would just say hey here is the demand
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here's the demand curve here is a
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product set of products that you have
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let's just go on optimize this is great
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this is challenging this is
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mathematically very beautiful but what
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we want to also think about is any
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optimization you do within your firm is
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going to affect people it's going to
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it's going to change how people respond
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how people behave and the overwhelming
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goal or the trajectory of my research
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focus has been on understanding these
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are people making decisions it's
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important to their lives it's important
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to the experience it's important to
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their utilities we have to integrate how
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they behave how they change their
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decisions into our optimization problems
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so now we have a more intricate
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operational problem there we are just
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things constantly but we also wonder how
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it changes people's decisions responses
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and again you integrate that back into
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your optimization problem this makes the
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problem challenging complicated harder
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but much more enjoyable and much more
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relevant to the community
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there are many challenges there's all
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these very different ways how consumers
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behave
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there is always phones that are looking
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for different data one of the one of the
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challenges that we have is we know very
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very little about how optimally we can
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price products how dynamically we can
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price products for various settings it's
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always challenging it's always
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constantly changing we can think of
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pricing tickets for a hockey team that's
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completely different from search pricing
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as uber or love to do how do consumers
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respond and call taxis when you change
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prices that's a completely different
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setting from thinking about how do you
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change pink prices when you ship from
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one part of the country to some other
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part of the country all of them have the
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same theoretical flavor but very
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different applications in each of these
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applications consumer responses quite
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diverse quite different so the challenge
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is there to take all this research and
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theory that we are knowing every minute
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every day and make it more applicable
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and that's part of what I want to do and
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that's part of what we have been doing
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at what along with my marketing
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colleagues here great doctoral students
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so this is this is one of the goals I
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have
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you
