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Alternative Microfoundations for Strategic Classification
Meena Jagadeesan · Celestine Mendler-Dünner · Moritz Hardt

Wed Jul 21 05:20 PM -- 05:25 PM (PDT) @
in Learning Theory 7 »

When reasoning about strategic behavior in a machine learning context it is tempting to combine standard microfoundations of rational agents with the statistical decision theory underlying classification. In this work, we argue that a direct combination of these ingredients leads to brittle solution concepts of limited descriptive and prescriptive value. First, we show that rational agents with perfect information produce discontinuities in the aggregate response to a decision rule that we often do not observe empirically. Second, when any positive fraction of agents is not perfectly strategic, desirable stable points---where the classifier is optimal for the data it entails---no longer exist. Third, optimal decision rules under standard microfoundations maximize a measure of negative externality known as social burden within a broad class of assumptions about agent behavior. Recognizing these limitations we explore alternatives to standard microfoundations for binary classification. We describe desiderata that help navigate the space of possible assumptions about agent responses, and we then propose the noisy response model. Inspired by smoothed analysis and empirical observations, noisy response incorporates imperfection in the agent responses, which we show mitigates the limitations of standard microfoundations. Our model retains analytical tractability, leads to more robust insights about stable points, and imposes a lower social burden at optimality.

Keywords: Game Theory and Computational Economics

Author Information

Meena Jagadeesan (UC Berkeley)
Celestine Mendler-Dünner (University of California, Berkeley)
Moritz Hardt (University of California, Berkeley)

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