Multicell experiments for marginal treatment effect estimation of digital ads

Caio Waisman and Brett Gordon

Papers from arXiv.org

Abstract: Randomized experiments with treatment and control groups are an important tool to measure the impacts of interventions. However, in experimental settings with one-sided noncompliance extant empirical approaches may not produce the estimands a decision maker needs to solve the problem of interest. For example, these experimental designs are common in digital advertising settings but typical methods do not yield effects that inform the intensive margin: how many consumers should be reached or how much should be spent on a campaign. We propose a solution that combines a novel multicell experimental design with modern estimation techniques that enables decision makers to solve problems with an intensive margin. Our design is straightforward to implement and does not require additional budget. We illustrate our method through simulations calibrated using an advertising experiment at Facebook, demonstrating its superior performance in various scenarios and its advantage over direct optimization approaches.

Date: 2023-02, Revised 2025-04
New Economics Papers: this item is included in nep-ecm and nep-exp
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