Understanding Group Sequential Testing

A/B tests are the golden standard of causal inference because they allow us to make valid causal statements under minimal assumptions, thanks to randomization. In fact, by randomly assigning a treatment (a drug, ad, product, …), we can compare the outcome of interest (a disease, firm revenue, customer satisfaction, …) across subjects (patients, users, customers, …) and attribute the average difference in outcomes to the causal effect of the treatment.

The implementation of an A/B test is usually not instantaneous, especially in online settings. Often users are treated live or in batches. In these settings, one can look at the data before the data collection is completed, one or multiple times. This phenomenon is called peeking. While looking is not problematic in itself, using standard testing procedures when peeking can lead to misleading conclusions.

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