5min chapter

Choiceology with Katy Milkman cover image

An Accidental Experiment: With Guests Steven Levitt, Solomon Ezra & Stephen Spector

Choiceology with Katy Milkman

CHAPTER

The Most Interesting Natural Experiment You've Ever Seen

The CEO of a company that did tours for high school kids tripled or quadrupled the revenues just by doing A-B testing through the mail. When people got these letters in the mail, they only got offered as one trip. And so you could see whether they would take the trip or not. The prices he was quoting didn't include the cost of the airline ticket to get to the city from which the tour departed. If we hadn't exploited this natural experiment, I thought there was no reason at all to do price reduction.

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