Seesaw Experimentation: A/B Tests with Spillovers
Fuente:
arXiv
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| Autori principali: | , , |
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| Natura: | Preprint |
| Pubblicazione: |
2024
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| _version_ | 1866909456869097472 |
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| author | Li, Jin Luo, Ye Zhang, Xiaowei |
| author_facet | Li, Jin Luo, Ye Zhang, Xiaowei |
| contents | This paper examines how spillover effects in A/B testing can impede organizational progress and develops strategies for mitigating these challenges. We identify a phenomenon termed ``seesaw experimentation'', where a firm's overall performance paradoxically deteriorates despite achieving continuous improvements in measured A/B testing metrics. Seesaw experimentation arises when successful innovations in primary metrics generate negative externalities in secondary, unmeasured dimensions. To address this problem, we propose implementing a positive hurdle rate for A/B test approval. We derive the optimal hurdle rate, offering a simple solution that preserves decentralized experimentation while mitigating negative spillovers. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2411_02085 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Seesaw Experimentation: A/B Tests with Spillovers Li, Jin Luo, Ye Zhang, Xiaowei General Economics Economics This paper examines how spillover effects in A/B testing can impede organizational progress and develops strategies for mitigating these challenges. We identify a phenomenon termed ``seesaw experimentation'', where a firm's overall performance paradoxically deteriorates despite achieving continuous improvements in measured A/B testing metrics. Seesaw experimentation arises when successful innovations in primary metrics generate negative externalities in secondary, unmeasured dimensions. To address this problem, we propose implementing a positive hurdle rate for A/B test approval. We derive the optimal hurdle rate, offering a simple solution that preserves decentralized experimentation while mitigating negative spillovers. |
| title | Seesaw Experimentation: A/B Tests with Spillovers |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2411.02085 |