Learning In Reverse Causal Strategic Environments With Ramifications on Two Sided Markets

Motivated by equilibrium models of labor markets, we develop a formulation of causal strategic classification in which strategic agents can directly manipulate their outcomes. As an application, we compare employers that anticipate the strategic response of a labor force with employers that do not. We show through a combination of theory and experiment that employers with performatively optimal hiring policies improve employer reward, labor force skill level, and in some cases labor force equity. On the other hand, we demonstrate that performative employers harm labor force utility and fail to prevent discrimination in other cases. In many applications of predictive modeling, the model itself may affect the distribution of samples on which it has to make predictions; this problem is known as strategic classification (Hardt et al., 2015; Brückner et al., 2012) or performative prediction (Perdomo et al., 2020). For example, traffic predictions affect route decisions, which ultimately impact traffic. Such situations can arise in a variety of applications; a common theme is that the samples correspond to strategic agents with an incentive to "game the system" and elicit a desired outcome from the model. In the standard strategic classification setup, the agents are allowed to modify their features, but they do not modify the outcome that the predictive model targets. An example of this is spam classification: spammers craft their messages (e.g. There is a line of work on causal strategic classification that seeks to generalize this setup by allowing the agents to change both their features and outcomes, usually by incorporating a causal model between the two (Miller et al., 2020; Kleinberg and Raghavan, 2020; Haghtalab et al., 2023; Horowitz and Rosenfeld, 2023).