“The hardest thing in a world full of technology is finding time to think. Technology only gives us information, but once we have that information we need the time to understand it.”

Laptops are a basic technology, but students don’t use them in Senthil Veeraraghavan’s classroom. That may seem ironic, since the Professor of Operations, Information, and Decisions earned a 2016 Wharton MBA Teaching Commitment and Curricular Innovation Award in part because of his use of technology in his Operations Strategy core curriculum class.

But Veeraraghavan prohibits classroom laptop use because he wants to make sure his students are undistracted from the class material and each other.

“Operations is about numbers, probability, uncertainty. It’s not obvious. You have to really think about it,” said Veeraraghavan. “I want to engage students so that it becomes obvious after the class.”

Making arcane business knowledge “obvious” to all MBA students is what the core curriculum is about – every MBA student should have the same knowledge base. But even though Operations Strategy is a core class, Wharton offers flexibility in how it’s taught. Veeraraghavan uses that flexibility daily in the technology he uses in front of the classroom.

“Depending on the numbers, I pull out software to use,” he said. In addition to using analytical software, he uses snap polls during class that create feedback data to feed the discussion. He finds that a poll can bring out minority viewpoints in the class.

“If students aren’t sure if others agree with them, they might not speak up,” he said. “But if you know if you’re one of ten people who feel the same way, you might. You’re still in the minority in class but there are ten people who agree with you. It’s unique data that comes from the class and it helps students feel more confident and process the information earlier.”

Veeraraghavan uses commercial apps, as well as software developed with Wharton Computing and Information Technology. But technology doesn’t have to be complex to work.

“Sometimes I just use Excel files to run the data and show it in EZ charts. These are standard innovations and they don’t require a lot of investment,” he said. “In the old days you could ask students to raise their hands. You can still do it, but this approach helps validate the data.”

That way, he said, “Once we’ve have data, we can talk about the data.”

Bringing Research to the Classroom

Recently Veeraraghavan has been studying how dynamic pricing works in practice and how consumers view pricing policies — policies that he’s found have gained enormous interest among his students, who include undergraduates, MBAs, executive MBAs, and PhDs.

“Students used to take cabs,” he says. “Now they take Uber. They are constantly seeing price adjustments happen in everyday life, so that’s what they expect. They think about pricing, the backend software that does it, building the software, but also how it’s implemented.”

Veeraraghavan’s most recent paper, co-authored with Joseph Jiaqi Xu and Peter Fader, Wharton marketing professor, studied how consumers respond to dynamic pricing for Major League Baseball tickets. They found that dynamic pricing does not necessarily lead to more profit unless the pricing model is right. At one point in the season, the club earned less with dynamic pricing than they did with a well-chosen static price.

“It’s a highly operational, marketing-oriented problem. If you are very careful setting your initial prices, you could stick with it and do very well,” Veeraraghavan said. “That means a lot of learning about your market and pricing. Dynamic pricing does not fix your problems, and if you use it poorly, it can worsen them.”

Recently Veeraraghavan has been talking to a Broadway production agency about setting pricing models for shows before they open.

“Traditionally Broadway is a place where people used to think about how long a show would run and what the prices would be after the fact,” he said. “But now producers think about it from the drawing board. If you have a huge hit like Hamilton, prices are sky high, but how do you manage prices for the next year?”

In sports, entertainment, and travel ticketing, consumers are receptive to dynamic pricing, but the model doesn’t work in every industry or for every product. Consider the anger and resistance when pharmaceutical companies raised prices for Epipens and Daraprim.

“The world is changing and people are more receptive to dynamic pricing adjustments, but I myself cannot imagine pharmaceuticals being a place where you can do this,” Veeraraghavan said. “There are places where it’s better for customers, but other places where dynamic pricing should not be used to extract money from consumers who are otherwise out of choices. You have to think about the long run, not just the next six months.”

Finding the Time to Think

When and how to make pricing models work are hard questions, and Veeraraghavan says technology alone does not give answers.

“The hardest thing in a world full of technology is finding time to think,” he said. “Students give me that feedback too. Having the downtime to think about one particular issue for 30 minutes at a stretch is very valuable. Technology only gives us information, but once we have that information we need the time to understand it.”

In his personal life, Veeraraghavan tries to unplug when he’s with his wife and children, ages 6 and 1. “In the summer we spend a lot of time outdoors. We go to a national parks,” he said. “We go camping and hiking. It’s shut-off time where you can be away from news and TV and the relentless articles that come our way.”

In his research and teaching, Veeraraghavan finds that technological demands are more of an ongoing challenge.

“No one has the answer about what’s the optimal use of technology and it’s going to change constantly,” he said. “ At Wharton we are flexible. We understand that the world is changing constantly and we want to figure it out.”

– Kelly Andrews

Posted: November 2, 2016

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