Encouragement Designs and Instrumental Variables for A/B Testing

This post introduces and details the application of encouragement designs and instrumental variables (IV) estimators within Spotify's A/B testing framework. It explains the theoretical underpinnings of these methods, contrasting them with standard A/B tests and tests with one-sided noncompliance. The post elaborates on the four user groups (always-takers, compliers, never-takers, defiers) and how they factor into the IV estimator for calculating the Local Average Treatment Effect (LATE) or Complier Average Causal Effect (CACE). This extends the platform's capabilities to measure feature impact in more challenging experimental setups.