Optimizing Social Utility in Sequential Experiments
Regulatory approval of products in high-stakes domains such as drug development requires statistical evidence of safety and efficacy through large-scale randomized controlled trials. However, the high financial cost of these trials may deter developers who lack absolute certainty in their product's efficacy, ultimately stifling the development of `moonshot' products that could offer high social utility. To address this inefficiency, in this paper, we introduce a statistical protocol for experimentation where the product developer (the agent) conducts a randomized controlled trial sequentially and the regulator (the principal) partially subsidizes its cost. By modeling the protocol using a...
| Authors | Ander Artola Velasco, Stratis Tsirtsis, Manuel Gomez-Rodriguez |
|---|---|
| Primary category | cs.GT |
| Published | 7 May 2026 |
| Last updated at source | 7 May 2026 |
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