Banks-McKelvey Memorial Lecture in Political Economy

Abstract: Classification algorithms are increasingly used in areas such as housing, credit, and law enforcement in order to make decisions affecting peoples' lives. These algorithms can change individual behavior deliberately (a fraud prediction algorithm deterring fraud) or inadvertently (content sorting algorithms spreading misinformation), and they are increasingly facing public scrutiny and regulation. Some of these regulations, like the elimination of cash bail in some states, have focused on lowering the stakes of certain classifications. In this paper we characterize how optimal classification by an algorithm designer can affect the distribution of behavior in a population—sometimes in surprising ways. We then look at the effect of democratizing the rewards and punishments, or stakes, to algorithmic classification to consider how a society can potentially stem (or facilitate!) predatory classification. Our results speak to questions of algorithmic fairness in settings where behavior and algorithms are interdependent, and where typical measures of fairness focusing on statistical accuracy across groups may not be appropriate.

Joint work with John Patty.

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This event is part of the Banks-McKelvey Memorial Lecture series, which honors the research and teaching of two colleagues who made seminal contributions to political economy. Jeffrey S. Banks was a 1986 Caltech PhD who, after a stellar career at University of Rochester, returned to Caltech in 1997. He made important contributions to game theory and the politics of voting. He was a fantastic teacher and, in the few years he was teaching at Caltech, trained some of our best students. Richard D. McKelvey (Banks' advisor) was a pioneer in just about every field of political science, including developing statistical methods for analyzing voting patterns, mathematical models of voting participation, and key contributions to game theory that spanned computer and social sciences. He was a member of both the National Academy of Sciences and the American Academy of Arts and Sciences. During his years at Caltech (1979-2001), he too was a celebrated teacher. We lost both of them prematurely.

The Banks-McKelvey Memorial Lecture series brings important figures in the social sciences to campus to energize the Caltech community to address new and important questions in the social sciences. The series is made possible by a gift of endowment from Howard E. Jessen (BS '46).