Incorporating ethics and welfare into Randomized experiments

Author

Yusuke Narita

Abstract

Randomized controlled trials (RCTs) enroll hundreds of millions of subjects and involve many human lives. To improve subjects’ welfare, I propose a design of RCTs that I call Experiment-asMarket (EXAM). EXAM produces a welfare-maximizing allocation of treatment-assignment probabilities, is almost incentivecompatible for preference elicitation, and unbiasedly estimates any causal effect estimable with standard RCTs. I quantify these properties by applying EXAM to a water-cleaning experiment in Kenya. In this empirical setting, compared to standard RCTs, EXAM improves subjects’ predicted well-being while reaching similar treatment-effect estimates with similar precision.

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