Design an A/B test for a recommendation algorithm
Last updated: December 31, 2025
Quick Overview
Design an experiment to test the impact of new pricing tiers. Include sample size calculation, metrics, and analysis plan.
Brex
December 31, 202574
4
1,599 solved
Design an experiment to test the impact of new pricing tiers. Include sample size calculation, metrics, and analysis plan.
Statistics questions at Brex test your ability to reason quantitatively and design rigorous experiments. This Take-home Project question evaluates your understanding of statistical inference and its application to business decisions.
What the Interviewer Expects
- Set up the problem formally with proper notation
- Apply the correct statistical test with clear justification
- Interpret results with appropriate caveats and confidence levels
- Discuss practical significance vs statistical significance
- Identify potential confounders and how to address them
Key Topics to Cover
How to Approach This
- Define your hypotheses (H0 and H1) clearly before performing any test.
- Calculate required sample size BEFORE running an experiment, using power analysis.
- Remember the Central Limit Theorem: sample means become approximately normal with large n.
- Watch for Simpson's paradox. Always segment data by key dimensions.
- Distinguish between statistical significance and practical significance.
Possible Follow-up Questions
- How would you design a follow-up experiment based on these results?
- How would you explain this result to a non-technical audience?
- What if the sample size is very small?
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Browse Statistics QuestionsSample Answer
Problem Formulation
To evaluate the impact of new pricing tiers on customer engagement and revenue, we will conduct an A/B test. We define the following parameters:
- Null Hypothesis (H0): The new pricing tiers have...
Solution Approach
To determine the required sample size, we will use the following steps:
- Estimate the effect size: Based on historical data, let's assume the current ARPU is $50, and we expect a 10% increase in...
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