John decided to conduct A/B testing on his online store. He is curious to estimate the...

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John decided to conduct A/B testing on his online store. He is curious to estimate the elasticity of demand using a causal method. He creates treatment and control groups as follows for a given product: On a given day, the first 100 customers are assigned to a treatment group where the price is increased by 5 percent and the next 100 customers get assigned to a control group that gets the normal price. John has a statistician estimate the effect of this price change on order quantities and calculates an elasticity. Critique John's experimental design. What confounders if any might be problematic? Can you find any issues or flaws in his design? Please be concise in your answer. John decided to conduct A/B testing on his online store. He is curious to estimate the elasticity of demand using a causal method. He creates treatment and control groups as follows for a given product: On a given day, the first 100 customers are assigned to a treatment group where the price is increased by 5 percent and the next 100 customers get assigned to a control group that gets the normal price. John has a statistician estimate the effect of this price change on order quantities and calculates an elasticity. Critique John's experimental design. What confounders if any might be problematic? Can you find any issues or flaws in his design? Please be concise in your answer.

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Johns experimental design has several flaws 1 Small sample size Johns sample size of 100 customers i... View the full answer