Booster Program: Business Experiments
How to use business experiments for evaluating the impact of new business policies
Companies and their managers are constantly instituting new policies in an effort to be profitable and remain competitive. They introduce new products, launch new marketing campaigns, change their workers’ compensation schemes, increase diversity in their labor force, and so on. Often these policies are designed based on “gut feeling”, “best practice”, or “received wisdom”. But are these policies successful? What is their impact? In order to answer these questions, one needs to be able to answer the counterfactual question, “What would have happened without this policy change?” Arguably, the best way to do that is to run a field experiment (a randomized control trial) in the company – much the same way pharmaceutical companies test new drugs.
This is a program on the use of business experiments for the quantitative evaluation of the impact of business policies. Determining the causal impact of different business policy interventions (“what works and what does not”) is typically difficult, and is not commonly used in business applications. The tools participants will learn have been developed and used by economists, so the applications that will be discussed will sometimes come from economics and public policy rather business. However, the reason for teaching these techniques is that they can and should be applied in business applications. By mastering these tools and understanding how to employ them, participants will be in a unique position to analyze the causal impact of different business policies, covering a variety of areas including (but not restricted to) human resource management, marketing, product development, and pricing. You will also have the opportunity to think about how to apply these tools to practical applications in participant´s company.
Executives who want to use of business experiments for the quantitative evaluation of the impact of business policies.
Upon completing this course you will have acquired the skills to:
- Analyze the causal effect of policies.
- Understand the value of experiments in making causal inference.
- Interpret experimental data.
- Design field experiments in companies.
- Regression Review and Introduction to Randomized Control Trials
- Designing Policy Experiments
- Designing and Interpreting a Business Policy Experiment
- Designing your own Business Policy Experiment
Meet the staff
Rajshri Jayaraman is an associate professor (with tenure) of economics, faculty lead of the Full-time MBA Program, and Karl-Heinz Kipp Chair in Research at ESMT Berlin. She received her PhD in Economics from Cornell University and worked at Center for Economic Studies (CES) in Munich before joining ESMT in 2007. Raji’s fields of interest are development economics and labour economics. Her research examines how people respond to incentives, using micro data on individuals, schools and firms in India, Germany and Canada. She is currently serving as faculty lead for our full-time MBA program.