Business Experiments As Persuasion

36 Pages Posted: 13 Feb 2024 Last revised: 27 Mar 2024

See all articles by Orie Shelef

Orie Shelef

University of Utah - David Eccles School of Business

rebecca Karp

Boston University

Robert Wuebker

University of Utah - David Eccles School of Business

Date Written: January 24, 2024

Abstract

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 of experimental strategy, introducing the possibility that at least some business experiments privilege persuasion over generating unbiased information. In this view, actors may craft experiments designed to gain support for their ideas, even if doing so reduces the informativeness of the experiment. 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 a formal model, this paper shows that under a wide range of conditions, actors prefer to enact a less than fully informative experiment designed to persuade—even when a fully-informative experiment is feasible at the same cost.

Keywords: Experimentation, Decision-Making, Entrepreneurship, Strategy, Bayesian Persuasion

JEL Classification: L26, M13, O31

Suggested Citation

Shelef, Orie and Karp, rebecca and Wuebker, Robert, Business Experiments As Persuasion (January 24, 2024). Available at SSRN: https://ssrn.com/abstract=4705883 or http://dx.doi.org/10.2139/ssrn.4705883

Orie Shelef

University of Utah - David Eccles School of Business ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

HOME PAGE: http://www.orieshelef.net

Rebecca Karp

Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

Robert Wuebker (Contact Author)

University of Utah - David Eccles School of Business ( email )

1645 East Campus Circle Drive
Salt Lake City, UT 84112-9304
United States

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