Two-Sided Prioritized Ranking: A Coherency-Preserving Design for Marketplace Experiments
This addresses the challenge of running unbiased pricing experiments in online marketplaces while preserving platform coherency, though it appears incremental as it builds on existing coherency-preserving designs.
The paper tackles the problem of interference and coherency violations in marketplace pricing experiments by proposing Two-Sided Prioritized Ranking (TSPR), which reduces estimation bias and provides sufficient statistical power in simulations based on Expedia hotel search data.
Online marketplaces frequently run pricing experiments in environments where users choose from a list of items. In these settings, items compete for users' limited attention and demand, creating interference among items within a list: Changing prices for any item can affect the demand for others, biasing estimates from item-level A/B tests. Besides, a key consideration in pricing experiments is preserving platform coherency across prices and item availability. This requirement rules out experimental designs such as user-level A/B tests as they violate platform coherency. We propose Two-Sided Prioritized Ranking (TSPR) to estimate the total average treatment effect of price changes in such settings. TSPR exploits position bias in ranked search results to create variation in treatment exposure without compromising coherency. TSPR randomizes both users and items and reorders ranked lists, prioritizing treated items for one group of users and untreated items for the other. All users see the same items at consistent prices, but differ in exposure to treatment as they pay disproportionate attention across ranks. In semi-synthetic simulations based on Expedia hotel search data, TSPR outperforms baseline coherency-preserving experiment designs by reducing estimation bias and providing sufficient statistical power.