Experiment-as-Market: Incorporating Welfare into Randomized Controlled Trials

No 2019-025, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: Randomized Controlled Trials (RCTs) enroll hundreds of millions of subjects and involve many human lives. To improve subjects' welfare, I propose a design of RCTs that I call Experiment-as-Market (EXAM). EXAM produces a Pareto efficient allocation of treatment assignment probabilities, is asymptotically incentive compatible for preference elicitation, and unbiasedly estimates any causal effect estimable with standard RCTs. I quantify these properties by applying EXAM to a water cleaning experiment in Kenya (Kremer et al., 2011). In this empirical setting, compared to standard RCTs, EXAM substantially improves subjects' predicted well-being while reaching similar treatment effect estimates with similar precision.

Keywords: clinical trial; social experiments; A/B test; market design; competitive equilibrium from equal income; Pareto efficiency; causal inference; development economics (search for similar items in EconPapers)
JEL-codes: C93 D47 O15 (search for similar items in EconPapers)
Date: 2019-04
New Economics Papers: this item is included in nep-des, nep-ecm and nep-exp
Note: MIP
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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http://humcap.uchicago.edu/RePEc/hka/wpaper/Narita_2019_experiment-as-market.pdf First version, January 10, 2019 (application/pdf)

Related works:
Working Paper: Experiment-as-Market: Incorporating Welfare into Randomized Controlled Trials (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hka:wpaper:2019-025

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