A Counterfactual Framework for Seller-Side A/B Testing on Marketplaces

Abstract

Many consumer products are two-sided marketplaces, ranging from commerce products that connect buyers and sellers, such as Amazon, Alibaba, and Facebook Marketplace, to sharing-economy products that connect passengers to drivers or guests to hosts, like Uber and Airbnb. The search and recommender systems behind these products are typically optimized for objectives like click-through, purchase, or booking rates, which are mostly tied to the consumer side of the marketplace (namely buyers, passengers, or guests). For the long-term growth of these products, it is also crucial to consider the value to the providers (sellers, drivers, or hosts). However, optimizing ranking for such objectives is uncommon because it is challenging to measure the causal effect of ranking changes on providers. For instance, if we run a standard seller-side A/B test on Facebook Marketplace that exposes a small percentage of sellers, what we observe in the test would be significantly different from when the treatment is launched to all sellers. To overcome this challenge, we propose a counterfactual framework for seller-side A/B testing. The key idea is that items in the treatment group are ranked the same regardless of experiment exposure rate. Similarly, the items in the control are ranked where they would be if the status quo is applied to all sellers. Theoretically, we show that the framework satisfies the stable unit treatment value assumption since the experience that sellers receive is only affected by their own treatment and independent of the treatment of other sellers. Empirically, both seller-side and buyer-side online A/B tests are conducted on Facebook Marketplace to verify the framework.