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Business Experiments As Persuasion

2024; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.4705883

1556-5068

Rebecca Karp, Orie Shelef, Robert Wuebker,

Opinion Dynamics and Social Influence

Much of the prior work on experimentation rests upon the assumption that entrepreneurs and managers use - or should optimally adopt - a "scientific approach" to test possible decisions before making them. This paper offers an alternative view on experimental strategy, introducing the possibility that at least some business experiments privilege persuasion over generating unbiased information. In this view, actors craft experiments not just to test ideas, but to gain support for them. However, decision-makers are not naïve - they are aware that the results they are reviewing may be the product of a curated information environment. Using both formal modeling and qualitative methods, this paper shows that under a wide range of conditions actors almost always develop experiments that prioritize persuasion over learning. Moreover, actors always design less than fully informative experiments, even when a fully-informative experiment is feasible at the same cost. This pantomime of the "scientific approach" to decision-making—what we call kayfabe experimentation—is always the optimal experiment. Even if there were such a thing as a "scientific" business experiment, that experiment is never the optimal experiment.