28 May 2009

Why I Won’t Get a PhD: Exhibit 1A

by Freddy Tran Nager, Founder of Atomic Tango + Ph.D. Conscientious Objector…

Since I love teaching and talking about marketing, friends often ask why I don’t get a PhD. I’ll think about it… then stumble upon an example of the actual work perpetrated by Ph.D.’s in my field…

Witness this latest atrocity by an assistant professor at Harvard Business School: “Monopolistic Competition Between Differentiated Products With Demand For More Than One Variety”. If you think that title is tasty, wait till you devour the abstract:

“We analyze the existence of pure strategy symmetric price equilibria in a generalized version of Salop (1979)’s circular model of competition between differentiated products—namely, we allow consumers to purchase more than one brand. When consumers purchase all varieties from which they derive non-negative net utility, there is no competition, so that each firm behaves like an unconstrained monopolist. When each consumer is interested in purchasing an exogenously given number (n) of varieties, we show that there is no pure strategy symmetric price equilibrium in general (for n > 2 with linear transportation costs). In turn, if the limitation on the number of varieties consumers purchase comes from a budget constraint then we obtain a multiplicity of symmetric price equilibria, which can be indexed by the number of varieties consumers purchase in equilibrium.”

That’s the whole thing, unedited by me. Keep in mind that the abstract is supposed to be a bite-size, easy-to-swallow summary. I don’t know about you, but I’m still chewing and trying to swallow.

Hardcore academics often forget that marketing is fundamentally about “communications.” Sorry, Doc, but if you can’t handle that, then I don’t care how well you can crunch Salop (1979)’s circular model of competition between differentiated products. Your subject matter is shopping. If your goal is to share your wisdom with people who actually practice marketing, it shouldn’t sound like a formulaic analysis of jet fuel.

So, the question is, do I really want to devote at least five years of my life to in-depth study of subject matter and readings that irresistibly sexy, just so I can do pretty much what I’m doing now, but with more politics and less sunshine? Hmm, the temptation is there, but I’m just gonna have to say… oh hell no.

P.S. Mark C. Taylor, the chairman of the religion department at Columbia, wrote a great editorial in the New York Times, “End the University as We Know It”. Quote:

“Graduate education is the Detroit of higher learning. Most graduate programs in American universities produce a product for which there is no market (candidates for teaching positions that do not exist) and develop skills for which there is diminishing demand (research in subfields within subfields and publication in journals read by no one other than a few like-minded colleagues), all at a rapidly rising cost (sometimes well over $100,000 in student loans).”

Amen, Prof. Taylor. And well said.

Update 6/4/10: The L.A. Times reports that, even if you get a PhD, your odds of finding a job in academia are very slim: “many graduates with doctoral degrees are finding themselves looking for jobs outside universities — jobs they probably could have gotten without five to six years of intense schooling and tens of thousands of dollars of education debt.”

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Freddy is the Founder & Creative Strategist of Atomic Tango. He also teaches graduate-level marketing communication courses at the University of Southern California (go Trojans!), shoots pool somewhat adequately, and herds cats. Freddy received his BA from Harvard and his MBA from USC.

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Ana LaDou
Ana LaDou
15 years ago

LOL. Insanity. How about a PhD in mythology…makes much more sense than the hairball that guy coughed up and called marketing.

15 years ago

My brain hurts.

15 years ago

Ugh. My husband is in a PhD program right now, and that’s exactly the kind of crapola he has to wade through. And his previous career was in communications, so it’s a special kind of torture.

14 years ago

You can I suppose always find fault with someone’s research. I think it’s pretty clear that SOME research is needed to advance technology–who is going to do it? Not big companies–most have dumped their research departments. Only the universities, which have their own constraints (publish or perish, etc.), can do this research. A PhD might waste his time on such a project as described above, in order to start an immensely productive career which REQUIRED that PhD as an entry level degree.

Consider that 50 years before it was needed, Ernst Mach was doing basic research in supersonic airflow. Basic research must be done, to understand the physics of any problem, well enough to design an application for that technology. Thomas Edison was an idiot, plodding along, trying 1000s of ways to do something, without eliminating obvious dead ends up front. Only the garage hobbyist can afford to waste the kind of time and resources Edison did.

14 years ago

It’s a badly written abstract.
To be fair, the paper is an economics paper, not a marketing paper.

If you venture in and read the paper, you’ll find that the Conclusion section is far more intelligible:
“This paper has proposed a theoretical framework for studying competition between differentiated products, when consumers are interested in purchasing more than one brand.
Indeed, the two classic frameworks for studying monopolistic competition – based on Salop
(1979) and, respectively, on Spence (1976) and Dixit and Stiglitz (1977) – do not seem adequate
proxies for markets such as those for software applications and videogames, which
combine features of both models, most importantly product differentiation, heterogeneity of consumer tastes and consumer preference for diversity. Accordingly, our model generalizes Salop’s circular framework by allowing consumers to purchase more than one variety.
The case in which consumers buy all products offering net positive utility is not very
interesting, as there is no competition among firms, so that each behaves like an unconstrained

Interestingly, this is what a graduate class professor at USC pointed out to us as “commoditization”. The point being, that when items reach commodity level, the pricing strategy becomes purely economic (i.e., lowest unit price dictates the choice). The author of the paper being critiqued here seems to have gone to great lengths to point out that video games are not commodity items, that is, they each have a unique appeal.

That explains demand for Rock Band and Guitar Hero quite well, IMHO.

Steven Hansen
Steven Hansen
14 years ago

I think it all started with the “deconstructist” movement in literary criticism, which makes a pseudo-Marxist travesty of the grand old tradition of scholarly examination of literature. The nonsense that now passes for criticism reminds me of the splitting-of-the-split-hair approach you’re seeing in this marketing piece. I get the impression that the conditions in that piece apply to one or two products in the whole world market place. A waste of time and mind.

Ron Shevlin
14 years ago

I can’t believe you’re knocking a study on non-negative net utility — affectionately known to PhDs as N3U . 🙂

While I couldn’t agree with you more, there’s another side to this coin. Increasingly, the PhDs are finding research topics to focus on that are simply chosen for their press appeal. Example: