Multiple randomization designs

Tue March 8th 2022, 4:30pm
Sloan 380C
Guido Imbens, Stanford GSB

In this study we introduce a new class of experimental designs. In a classical randomized controlled trial (RCT), or A/B test, a randomly selected subset of a population of units (e.g., individuals, plots of land, or experiences) is assigned to a treatment (treatment A), and the remainder of the population is assigned to the control treatment (treatment B). The difference in average outcome by treatment group is an estimate of the average effect of the treatment. However, motivating our study, the setting for modern experiments is often different, with the outcomes and treatment assignments indexed by multiple populations. For example, outcomes may be indexed by buyers and sellers, by content creators and subscribers, by drivers and riders, or by travelers and airlines and travel agents, with treatments potentially varying across these indices. Spillovers or interference can arise from interactions between units across populations. For example, sellers' behavior may depend on buyers' treatment assignment, or vice versa. This can invalidate the simple comparison of means as an estimator for the average effect of the treatment in classical RCTs. We propose new experiment designs for settings in which multiple populations interact. We show how these designs allow us to study questions about interference that cannot be answered by classical randomized experiments. Finally, we develop new statistical methods for analyzing these multiple randomization designs.

This is joint work with Patrick Bajari, Brian Burdick, Lorenzo Masoero, James McQueen, Thomas Richardson, and Ido M. Rosen.