First-See-Then-Design: A Multi-Stakeholder View for Optimal Performance-Fairness Trade-Offs

TL;DR

This paper introduces a multi-stakeholder, welfare-based framework for fair algorithmic decision-making, emphasizing utilities of decision-makers and subjects, and demonstrating the benefits of stochastic policies for optimal trade-offs.

Contribution

It proposes a novel multi-stakeholder, justice-oriented framework for fairness in decision-making, moving beyond prediction-centric approaches and analyzing stochastic policies.

Findings

Stochastic policies can outperform deterministic ones in fairness-performance trade-offs.

The framework models utilities of both decision-makers and subjects for fairness evaluation.

Simple stochastic policies leverage outcome uncertainty to improve social welfare and fairness.

Abstract

Fairness in algorithmic decision-making is often defined in the predictive space, where predictive performance - used as a proxy for decision-maker (DM) utility - is traded off against prediction-based fairness notions, such as demographic parity or equality of opportunity. This perspective, however, ignores how predictions translate into decisions and ultimately into utilities and welfare for both DM and decision subjects (DS), as well as their allocation across social-salient groups. In this paper, we propose a multi-stakeholder framework for fair algorithmic decision-making grounded in welfare economics and distributive justice, explicitly modeling the utilities of both the DM and DS, and defining fairness via a social planner's utility that captures inequalities in DS utilities across groups under different justice-based fairness notions (e.g., Egalitarian, Rawlsian). We formulate fair decision-making as a post-hoc multi-objective optimization problem, characterizing the achievable performance-fairness trade-offs in the two-dimensional utility space of DM utility and the social planner's utility, under different decision policy classes (deterministic vs. stochastic, shared vs. group-specific). Using the proposed framework, we then identify conditions (in terms of the stakeholders' utilities) under which stochastic policies are more optimal than deterministic ones, and empirically demonstrate that simple stochastic policies can yield superior performance-fairness trade-offs by leveraging outcome uncertainty. Overall, we advocate a shift from prediction-centric fairness to a transparent, justice-based, multi-stakeholder approach that supports the collaborative design of decision-making policies.