Misaligned by Design: Incentive Failures in Machine Learning

The cost of error in many high-stakes settings is asymmetric: misdiagnosing pneumonia when absent is an inconvenience, but failing to detect it when present can be life-threatening. Because of this, artificial intelligence (AI) models used to assist such decisions are frequently trained with asymmetric loss functions that incorporate human decision-makers' trade-offs between false positives and false negatives. In two focal applications, we show that this standard alignment practice can backfire. In both cases, it would be better to train the machine learning model with a loss function that ignores the human's objective and then adjust predictions ex post according to that objective. We rationalize this result using an economic model of incentive design with endogenous information acquisition. The key insight from our theoretical framework is that machine classifiers perform not one but two incentivized tasks: choosing how to classify and learning how to classify. We show that while the adjustments engineers use correctly incentivize choosing, they can simultaneously reduce the incentives to learn. Our formal treatment of the problem reveals that methods embraced for their intuitive appeal can in fact misalign human and machine objectives in predictable ways.

Calibrating for Class Weights by Modeling Machine Learning

A much studied issue is the extent to which the confidence scores provided by machine learning algorithms are calibrated to ground truth probabilities. Our starting point is that calibration is seemingly incompatible with class weighting, a technique often employed when one class is less common (class imbalance) or with the hope of achieving some external objective (cost-sensitive learning). We provide a model-based explanation for this incompatibility and use our anthropomorphic model to generate a simple method of recovering likelihoods from an algorithm that is miscalibrated due to class weighting. We validate this approach in the binary pneumonia detection task of Rajpurkar, Irvin, Zhu, et al. (2017).