Fairness in decision-making the causal explanation formula

Abstract

AI plays an increasingly prominent role in society since decisions that were once made by humans are now delegated to automated systems. These systems are currently in charge of deciding bank loans, criminals' incarceration, and the hiring of new employees, and it's not difficult to envision that they will in the future underpin most of the decisions in society. Despite the high complexity entailed by this task, there is still not much understanding of basic properties of such systems. For instance, we currently cannot detect (neither explain nor correct) whether an AI system is operating fairly (i.e., is abiding by the decision-constraints agreed by society) or it is reinforcing biases and perpetuating a preceding prejudicial practice. Issues of discrimination have been discussed extensively in legal circles, but there exists still not much understanding of the formal conditions that a system must adhere to be deemed fair. In this paper, we use the language of structural causality (Pearl, 2000) to fill in this gap. We start by introducing three new fine-grained measures of transmission of change from stimulus to effect, which we called counterfactual direct (Ctf-DE), indirect (Ctf-IE), and spurious (Ctf-SE) effects. We then derive the causal explanation formula, which allows the AI designer to quantitatively evaluate fairness and explain the total observed disparity of decisions through different discriminatory mechanisms. We apply these results to various discrimination analysis tasks and run extensive simulations, including detection, evaluation, and optimization of decision-making under fairness constraints. We conclude studying the trade-off between different types of fairness criteria (outcome and procedural), and provide a quantitative approach to policy implementation and the design of fair decision-making systems.