Statistical Discrimination in Ratings-Guided Markets

Yeon-Koo Che, Kyungmin Kim and Weijie Zhong

Papers from arXiv.org

Abstract: We study statistical discrimination of individuals based on payoff-irrelevant social identities in markets that utilize ratings and recommendations for social learning. Even though rating/recommendation algorithms can be designed to be fair and unbiased, ratings-based social learning can still lead to discriminatory outcomes. Our model demonstrates how users' attention choices can result in asymmetric data sampling across social groups, leading to discriminatory inferences and potential discrimination based on group identities.

Date: 2020-04, Revised 2024-11
New Economics Papers: this item is included in nep-gen and nep-mic
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