A/B Test Design and Analysis: Core Concepts
Scenario
You are advising on the design and analysis of an A/B test for a new product feature (e.g., a checkout or payments flow change). Assume standard online experimentation: users are randomly assigned to control (A) or treatment (B), and we observe conversion and risk outcomes.
Questions
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What does a p-value represent in the context of an experiment?
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Define Type-I and Type-II errors and give business-relevant examples.
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Describe Simpson’s Paradox and why it is dangerous in experiment readouts.
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How would you select primary, secondary, and guard-rail metrics for this experiment?
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If randomization were impossible, name and briefly describe two causal-inference methods you would use.