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statistical-experiments-and-testing.md

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@@ -161,7 +161,8 @@ This algorithm let's you explore and exploit by promoting better performering gr
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1. Generete a uniformly distributed random number between 0 and 1.
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2. If the number lies between 0 and epsilon, flip a fair coin and show A if heads, else show B.
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3. If the number is greater than epsilon, show whichever A or B sample group that has had the highest response rate to date.
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Epsiolon is the single parameter that governs this algorithm. If epsilon is 1, we end up with a standard simple A/B experiment. If epsilon is 0 we get a purely greedy algorithm.
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Epsilon is the single parameter that governs this algorithm. If epsilon is 1, we end up with a standard simple A/B experiment. If epsilon is 0 we get a purely greedy algorithm.
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A more sophisticated algorithm would use Thompson's sampling.
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Bandit algorithms can efficiently handle 3+ treatments and move toward optimal selection of the "best". For traditional statistical testing procedures, the complexity of decision making for 3+ treatments far outstrips that of the traditional A/B test, and the advantage of bandit algorithms is much greater.
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