Qini Curve Estimation under Clustered Network Interference

TL;DR

This paper develops methods for accurately estimating Qini curves in settings with clustered network interference, which is common in real-world applications like marketing, by proposing three strategies and validating them through simulations.

Contribution

It introduces a formal framework and three estimation strategies for Qini curves under clustered network interference, addressing a key gap in existing methods.

Findings

Proposed three estimation strategies suited to different interference conditions.

Provided guidance on bias-variance trade-offs in strategy selection.

Validated methods using a simulated e-commerce marketplace environment.

Abstract

Qini curves are a widely used tool for assessing treatment policies under allocation constraints as they visualize the incremental gain of a new treatment policy versus the cost of its implementation. Standard Qini curve estimation assumes no interference between units: that is, that treating one unit does not influence the outcome of any other unit. In many real-life applications such as public policy or marketing, however, the presence of interference is common. Ignoring interference in these scenarios can lead to systematically biased Qini curves that over- or under-estimate a treatment policy's cost-effectiveness. In this paper, we address the problem of Qini curve estimation under clustered network interference, where interfering units form independent clusters. We propose a formal description of the problem setting with an experimental study design under which we can account for clustered network interference. Within this framework, we describe three estimation strategies, each suited to different conditions, and provide guidance for selecting the most appropriate approach by highlighting the inherent bias-variance trade-offs. To complement our theoretical analysis, we introduce a marketplace simulator that replicates clustered network interference in a typical e-commerce environment, allowing us to evaluate and compare the proposed strategies in practice.