Fairness in Selection Problems with Strategic Candidates

TL;DR

This paper investigates how strategic candidate behavior influences fairness in selection processes, modeling it as a contest game and analyzing the effects of demographic parity constraints on discrimination and outcomes.

Contribution

It introduces a game-theoretic model of strategic effort in selection problems with differential variance and analyzes equilibrium under fairness constraints.

Findings

Strategic effort alters discrimination patterns at equilibrium.

Demographic parity constraints can have counterintuitive effects on fairness.

Results differ significantly from non-strategic models.

Abstract

To better understand discriminations and the effect of affirmative actions in selection problems (e.g., college admission or hiring), a recent line of research proposed a model based on differential variance. This model assumes that the decision-maker has a noisy estimate of each candidate's quality and puts forward the difference in the noise variances between different demographic groups as a key factor to explain discrimination. The literature on differential variance, however, does not consider the strategic behavior of candidates who can react to the selection procedure to improve their outcome, which is well-known to happen in many domains. In this paper, we study how the strategic aspect affects fairness in selection problems. We propose to model selection problems with strategic candidates as a contest game: A population of rational candidates compete by choosing an effort level to increase their quality. They incur a cost-of-effort but get a (random) quality whose expectation equals the chosen effort. A Bayesian decision-maker observes a noisy estimate of the quality of each candidate (with differential variance) and selects the fraction $\alpha$ of best candidates based on their posterior expected quality; each selected candidate receives a reward $S$. We characterize the (unique) equilibrium of this game in the different parameters' regimes, both when the decision-maker is unconstrained and when they are constrained to respect the fairness notion of demographic parity. Our results reveal important impacts of the strategic behavior on the discrimination observed at equilibrium and allow us to understand the effect of imposing demographic parity in this context. In particular, we find that, in many cases, the results contrast with the non-strategic setting.