Explainer: What Is A/b Testing?

How does A/B testing work? And is its simplicity too basic for today’s complex online platforms?

A/B testing is so common that many of us don’t even notice it. Whenever you pick up your phone, you’re likely becoming part of an A/B test, as sites and apps try to figure out what will get you to click, scroll, or download.

But in “two-sided” marketplaces for ridesharing and home rentals, running an experiment on one group of buyers simultaneously affects what’s available for all other buyers — which can affect the entire market. This cascade of “interference” means the experimental group can no longer be isolated for study. So researchers are tweaking and expanding the boundaries of A/B testing to try and keep up with platforms that mediate interactions between multiple users with different goals.

Stanford Graduate School of Business professors have been at the forefront of upgrading A/B testing for the digital age. Guido Imbens and Gabriel Weintraub independently yet simultaneously experimented with similar ways to run interference-free tests on two-sided platforms. Mohsen Bayati has worked with “multi armed-bandits” dynamic experiments that change as it becomes clear which option is working best.

It’s an exciting time of innovation for a model that permeates our lives. This short explainer video breaks it down..#explainers #howto #stanfordbusiness #video #gsb