To Give or Not to Give? The Impacts of Strategically Withheld Recourse

2025-04-08

AI Summary

This paper addresses the fairness–social utility trade-off arising from strategic recourse withholding—i.e., automated decision systems’ refusal to provide actionable recourse to adversely affected users. Existing rational utility-maximizing systems often suppress recourse provision due to fears of user manipulation, especially under collective information sharing, leading to diminished aggregate utility and exacerbated inequities for sensitive groups. We formalize, for the first time, the recourse game imbalance in multi-user settings with information sharing and propose a subsidy-based mechanism design to realign system incentives. Theoretical analysis and empirical evaluation demonstrate that our mechanism significantly increases recourse provision rates, reduces societal cost, and improves inter-group fairness. By jointly enhancing efficiency and equity, it offers a governance framework for accountable AI systems.

Technology Category

• Multiagent Systems: Mechanism Design
• Philosophy and Ethics of AI: Bias, Fairness & Equity
• Game Theory and Economic Paradigms: Fair Division

Application Category

• User Modeling, Personalization and Recommendation: Fairness-aware retrieval and ranking
• Economics, Online Markets and Human Computation: Fairness and ethical considerations in crowd work and in human-in-the-loop AI systems
• Responsible Web: Machine-in-the-loop, human agency and autonomy

Abstract

Individuals often aim to reverse undesired outcomes in interactions with automated systems, like loan denials, by either implementing system-recommended actions (recourse), or manipulating their features. While providing recourse benefits users and enhances system utility, it also provides information about the decision process that can be used for more effective strategic manipulation, especially when the individuals collectively share such information with each other. We show that this tension leads rational utility-maximizing systems to frequently withhold recourse, resulting in decreased population utility, particularly impacting sensitive groups. To mitigate these effects, we explore the role of recourse subsidies, finding them effective in increasing the provision of recourse actions by rational systems, as well as lowering the potential social cost and mitigating unfairness caused by recourse withholding.

Problem

• Impact of withholding recourse on user outcomes
• Tension between recourse benefits and strategic manipulation
• Effectiveness of subsidies in mitigating recourse withholding

Innovation

• Strategic recourse withholding for system utility
• Recourse subsidies mitigate unfairness
• Collective information sharing impacts manipulation