The Power of Experiments: Decision Making in a Data-Driven World(The MIT Press)

How organizations-including Google, StubHub, Airbnb, and Facebook-learn from experiments in a data-driven world.Have you logged into Facebook recently? Searched for something on Google? Chosen a movie on Netflix? If so, you've probably been an unwitting participant in a variety of experiments-also known as randomized controlled trials-designed to test the impact of different online experiences. Once an esoteric tool for academic research, the randomized controlled trial has gone mainstream. No tech company worth its salt (or its share price) would dare make major changes to its platform without first running experiments to understand how they would influence user behavior. In this book, Michael Luca and Max Bazerman explain the importance of experiments for decision making in a data-driven world. Luca and Bazerman describe the central role experiments play in the tech sector, drawing lessons and best practices from the experiences of such companies as StubHub, Alibaba, and Uber. Successful experiments can save companies money-eBay, for example, discovered how to cut $50 million from its yearly advertising budget-or bring to light something previously ignored, as when Airbnb was forced to confront rampant discrimination by its hosts. Moving beyond tech, Luca and Bazerman consider experimenting for the social good-different ways that govenments are using experiments to influence or "nudge" behavior ranging from voter apathy to school absenteeism. Experiments, they argue, are part of any leader's toolkit. With this book, readers can become part of "the experimental revolution."

About the Author :
Michael Luca is Lee J. Styslinger III Associate Professor of Business Administration at Harvard Business School. His writing has appeared in publications including the Atlantic, Wall Street Journal, Harvard Business Review, and Slate. Max H. Bazerman is Jesse Isidor Straus Professor of Business Administration at Harvard Business School. He is the author of The Power of Noticing and the coauthor of Blind Spots, Negotiation Genius, and other books.

Review :

Driven by experimentation, a further transformation is in the air.

In a forthcoming book, “The Power of Experiments: Decision-Making in a Data-Driven World,” Harvard professors Michael Luca and Max Bazerman show how such experiments have helped organizations from eBay to the U.K. tax authority make better decisions. By testing different strategies on a limited pool of unwitting customers before implementing them, they say, companies can eliminate guesswork and intuition and build products and processes “that better account for the many quirks of human behavior.”

Luca and Bazerman balance their passion for experiments with a recognition of its limits.

'The Power of Experiments' is a terrific overview of how organizations, especially online companies but also government and other groups, can use A/B testing to optimize their results. Luca and Bazerman also discuss issues of ethics and consent that affect these efforts, perhaps limiting what some parties can or should do...an excellent book for managers and executives who oversee online marketing or other behavioral elements of an operation. While most professional marketers will be familiar with the concepts and examples presented in the book, Luca and Bazerman's easy style and approachable writing provide an excellent introduction or refresher for non-specialists at all levels. Highly recommended.

—Technology and Society

Filled with charming stories of experiments offering novel solutions to pressing social questions, 'The Power of Experiments: Decision Making in a Data-Driven World' is an enjoyable read that celebrates the power of experimentation to create social change.

'The Power of Experiments' is a fast, accessible read that offers a good overview of the applications, promise, and perils of experimentation. It's a good place for executives to start as they consider whether and how to use experiments inside their companies.