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Science of price experimentation at Amazon

Author

Listed:
  • Joe Cooprider

    (Amazon Retail Pricing Science and Research)

  • Shima Nassiri

    (Amazon Retail Pricing Science and Research)

Abstract

In order to improve prices at Amazon, we created Pricing Labs, a price experimentation platform. Since we do not price discriminate, we must run product-randomized experiments. We discuss how we randomize to prevent spillovers, run different experimental designs (i.e., crossovers) to improve precision, and control for demand trends and differences in treatment groups to get more precise treatment effect estimates.

Suggested Citation

  • Joe Cooprider & Shima Nassiri, 2023. "Science of price experimentation at Amazon," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 58(1), pages 34-41, January.
    • Handle: RePEc:pal:buseco:v:58:y:2023:i:1:d:10.1057_s11369-023-00303-9
    DOI: 10.1057/s11369-023-00303-9
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    References listed on IDEAS

    as
    1. Stefan Wager & Susan Athey, 2018. "Estimation and Inference of Heterogeneous Treatment Effects using Random Forests," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 113(523), pages 1228-1242, July.
    2. Athey, Susan & Bickel, Peter J. & Chen, Aiyou & Imbens, Guido W. & Pollmann, Michael, 2021. "Semiparametric Estimation of Treatment Effects in Randomized Experiments," Research Papers 3986, Stanford University, Graduate School of Business.
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    Cited by:

    1. Lars Roemheld & Justin Rao, 2024. "Interference Produces False-Positive Pricing Experiments," Papers 2402.14538, arXiv.org.

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