LITMIR.BIZ

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new things—to assume the best about them, in the absence of evidence to the contrary. In the long run, optimism is the best prevention for regret.

      Bandits Online

      In 2007, Google product manager Dan Siroker took a leave of absence to join the presidential campaign of then senator Barack Obama in Chicago. Heading the “New Media Analytics” team, Siroker brought one of Google’s web practices to bear on the campaign’s bright-red DONATE button. The result was nothing short of astonishing: $57 million of additional donations were raised as a direct result of his work.

      What exactly did he do to that button?

      He A/B tested it.

      A/B testing works as follows: a company drafts several different versions of a particular webpage. Perhaps they try different colors or images, or different headlines for a news article, or different arrangements of items on the screen. Then they randomly assign incoming users to these various pages, usually in equal numbers. One user may see a red button, while another user may see a blue one; one may see DONATE and another may see CONTRIBUTE. The relevant metrics (e.g., click-through rate or average revenue per visitor) are then monitored. After a period of time, if statistically significant effects are observed, the “winning” version is typically locked into place—or becomes the control for another round of experiments.

      In the case of Obama’s donation page, Siroker’s A/B tests were revealing. For first-time visitors to the campaign site, a DONATE AND GET A GIFT button turned out to be the best performer, even after the cost of sending the gifts was taken into account. For longtime newsletter subscribers who had never given money, PLEASE DONATE worked the best, perhaps appealing to their guilt. For visitors who had already donated in the past, CONTRIBUTE worked best at securing follow-up donations—the logic being perhaps that the person had already “donated” but could always “contribute” more. And in all cases, to the astonishment of the campaign team, a simple black-and-white photo of the Obama family outperformed any other photo or video the team could come up with. The net effect of all these independent optimizations was gigantic.

      If you’ve used the Internet basically at all over the past decade, then you’ve been a part of someone else’s explore/exploit problem. Companies want to discover the things that make them the most money while simultaneously making as much of it as they can—explore, exploit. Big tech firms such as Amazon and Google began carrying out live A/B tests on their users starting in about 2000, and over the following years the Internet has become the world’s largest controlled experiment. What are these companies exploring and exploiting? In a word, you: whatever it is that makes you move your mouse and open your wallet.

      Companies A/B test their site navigation, the subject lines and timing of their marketing emails, and sometimes even their actual features and pricing. Instead of “the” Google search algorithm and “the” Amazon checkout flow, there are now untold and unfathomably subtle permutations. (Google infamously tested forty-one shades of blue for one of its toolbars in 2009.) In some cases, it’s unlikely that any pair of users will have the exact same experience.

      Data scientist Jeff Hammerbacher, former manager of the Data group at Facebook, once told Bloomberg Businessweek that “the best minds of my generation are thinking about how to make people click ads.” Consider it the millennials’ Howl—what Allen Ginsberg’s immortal “I saw the best minds of my generation destroyed by madness” was to the Beat Generation. Hammerbacher’s take on the situation was that this state of affairs “sucks.” But regardless of what one makes of it, the web is allowing for an experimental science of the click the likes of which had never even been dreamed of by marketers of the past.

      We know what happened to Obama in the 2008 election, of course. But what happened to his director of analytics, Dan Siroker? After the inauguration, Siroker returned west to California, and with fellow Googler Pete Koomen co-founded the website optimization firm Optimizely. By the 2012 presidential election cycle, their company counted among its clients both the Obama re-election campaign and the campaign of Republican challenger Mitt Romney.

      Within a decade or so after its first tentative use, A/B testing was no longer a secret weapon. It has become such a deeply embedded part of how business and politics are conducted online as to be effectively taken for granted. The next time you open your browser, you can be sure that the colors, images, text, perhaps even the prices you see—and certainly the ads—have come from an explore/exploit algorithm, tuning itself to your clicks. In this particular multi-armed bandit problem, you’re not the gambler; you’re the jackpot.

      The process of A/B testing itself has become increasingly refined over time. The most canonical A/B setup—splitting the traffic evenly between two options, running the test for a set period of time, and thereafter giving all the traffic to the winner—might not necessarily be the best algorithm for solving the problem, since it means half the users are stuck getting the inferior option as long as the test continues. And the rewards for finding a better approach are potentially very high. More than 90% of Google’s approximately $50 billion in annual revenue currently comes from paid advertising, and online commerce comprises hundreds of billions of dollars a year. This means that explore/exploit algorithms effectively power, both economically and technologically, a significant fraction of the Internet itself. The best algorithms to use remain hotly contested, with rival statisticians, engineers, and bloggers endlessly sparring about the optimal way to balance exploration and exploitation in every possible business scenario.

      Debating the precise distinctions among various takes on the explore/exploit problem may seem hopelessly arcane. In fact, these distinctions turn out to matter immensely—and it’s not just presidential elections and the Internet economy that are at stake.

      It’s also human lives.

      Clinical Trials on Trial

      Between 1932 and 1972, several hundred African-American men with syphilis in Macon County, Alabama, went deliberately untreated by medical professionals, as part of a forty-year experiment by the US Public Health Service known as the Tuskegee Syphilis Study. In 1966, Public Health Service employee Peter Buxtun filed a protest. He filed a second protest in 1968. But it was not until he broke the story to the press—it appeared in the Washington Star on July 25, 1972, and was the front-page story in the New York Times the next day—that the US government finally halted the study.

      What followed the public outcry, and the subsequent congressional hearing, was an initiative to formalize the principles and standards of medical ethics. A commission held at the pastoral Belmont Conference Center in Maryland resulted in a 1979 document known as the Belmont Report. The Belmont Report lays out a foundation for the ethical practice of medical experiments, so that the Tuskegee experiment—an egregious, unambiguously inappropriate breach of the health profession’s duty to its patients—might never be repeated. But it also notes the difficulty, in many other cases, of determining exactly where the line should be drawn.

      “The Hippocratic maxim ‘do no harm’ has long been a fundamental principle of medical ethics,” the report points out. “[The physiologist] Claude Bernard extended it to the realm of research, saying that one should not injure one person regardless of the benefits that might come to others. However, even avoiding harm requires learning what is harmful; and, in the process of obtaining this information, persons may be exposed to risk of harm.”

      The Belmont Report thus acknowledges, but does not resolve, the tension that exists between acting on one’s best knowledge and gathering more. It also makes it clear that gathering knowledge can be so valuable that some aspects of normal medical ethics can be suspended. Clinical testing of new drugs and treatments, the report notes, often requires risking harm to some patients, even if steps are taken to minimize that risk.

      The principle of beneficence is not always so unambiguous. A difficult ethical problem remains, for example, about research [on childhood diseases] that presents more than minimal risk without immediate prospect of direct benefit to the children involved. Some have argued that such research is inadmissible, while others have pointed out that this limit would rule out much research promising great benefit to children in the future. Here again, as with all hard cases, the different claims covered by the principle of beneficence may

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