Comparing tender and auction of houses
This simulation shows that the effect of a treatment (selling each house by auction or tender) is estimated more accurately in a randomised block experiment than in a completely randomised experiment (at least provided the blocks differ from each other).
The top half of the diagram conducts a completely randomised experiment and the bottom half conducts a randomised block experiment where the blocks are different parts of the city. The letters on the houses indicate which are sold by aution or tender. Click Repeat several times for each of the experiments.
Observe that the estimate of the effect of the treatment (the difference between the mean prices for auction and tender) is much more accurate (less variable)for the randomised block experiment.
(The differences between the blocks (parts of the city) and the underlying effect of the treatment can be varied with the sliders at the top of the diagram.)
The context is an experiment about the sale of 24 identical rental houses, 8 in each of three parts of a city. Half of the houses are sold by auction and the other half by tender.