Experiments in Business

Here’s an article in today’s Financial Times about a class on business experimentation that John List and I taught at the Booth School of Business. It does a nice job of laying out our philosophy regarding data and experiments.

Thankfully, the reporter did not mention that most of the students hated the class.

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  1. Pau says:

    Being an ex-Booth student, freakonomics fan and follower and data-analysis professional in an airline I would very much appreciate to access the course documentation if it where possible as it is with MIT courses.

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  2. science minded says:

    When a business other than science conducts experiments, I am wary of the intent—for there is knowledge and the use to which it is put. Leave the experimenting to scientists. am not against the use of scientific knowledge by business– but have found that when the two are joined- the research suffers. the agenda (policy) of the institution paying for the research becomes the dominant perspective guiding the research. Hence, nothing is really learned. Busniness like to convince themselves of the fact that their policies are working even when they are not.

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  3. Marco says:

    I’ve an MBA, and now teach MBAs – here’s my 2 cents.

    Most of our students frankly don’t have a comparative advantage in statistics and struggle with hypothesis testing even without the added complications of causality, selection biases etc. (This may be why Dr Levitt’s students didn’t like the course!)

    Maybe what we should be teaching is upstream? E.g. how to recognize a business problem which needs experimentation? I believe there’s still a well-paying market for “business analyst” skills, necessary to structure the problem for downstream execution by partners.

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  4. Jonathan Marek says:

    Fascinating article! The company where I work does exactly this for a living — working with retailers, financial services, and consumer products companies to design and evaluate business experiments. There is a lot more demand for Test & Learn among large companies than there was only 5 years ago, so I’m glad there are b-school courses emerging in this area. Believe me — it can help your students to get a job and to help their employers make better decisions!

    As for the comments from “science minded”, I think that is a valid concern, but one that has to be overcome. As with all good business decision making, testing (and analytics generally) require that the practioners are ruthlessly honest with themselves in order to get beneficial results. That ruthless honesty is something we ought to be encouraging in the business world.

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  5. Keith Gillette says:

    Dan Ariely, Professor of Behavioral Economics at Duke University and a visiting professor at MIT’s Media Laboratory, argues for exactly this type of business education course today in MIT’s Technology Review blog:

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