Design an A/B test for a pricing model
Last updated: April 25, 2026
Quick Overview
Design an experiment to test the impact of new pricing tiers. Include sample size calculation, metrics, and analysis plan.
Redfin
April 25, 202618
7
964 solved
Design an experiment to test the impact of new pricing tiers. Include sample size calculation, metrics, and analysis plan.
This analytics question from Redfin's Take-home Project tests your ability to think critically about data. The interviewer expects you to consider confounding variables, selection bias, and the difference between correlation and causation.
What the Interviewer Expects
- Design a rigorous experiment with proper randomization and sample size calculation
- Define primary and guardrail metrics with clear rationale
- Address novelty effects, network effects, and interference
- Segment results appropriately and identify heterogeneous treatment effects
- Propose follow-up analyses when results are ambiguous
Key Topics to Cover
How to Approach This
- Define success metrics carefully. A good metric is measurable, actionable, and aligned with business goals.
- Run experiments long enough to account for novelty effects and weekly seasonality.
- Use funnel analysis to identify where users drop off for maximum optimization impact.
- Segment results by key dimensions (platform, country, user cohort) to catch hidden patterns.
- Consider network effects and interference between treatment and control groups.
Possible Follow-up Questions
- What if the experiment shows a positive short-term effect but you suspect a negative long-term impact?
- What would you do if a stakeholder wants to end the experiment early because initial results look good?
- How would you handle interference between treatment and control?
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Browse Analytics QuestionsSample Answer
Problem Setup
To assess the impact of new pricing tiers on customer engagement and conversion rates at Redfin, we need to frame the analytical question: "How do the new pricing tiers affect the conversion rates of ...
Methodology
We will employ a randomized controlled A/B testing framework to compare conversion rates between the control group (existing pricing model) and the treatment group (new pricing tiers). The statistical...
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