The Effects of AI Biases and Explanations on Human Decision Fairness: A Case Study of Bidding in Rental Housing Markets

Abstract

The use of AI-based decision aids in diverse domains has inspired many empirical investigations into how AI models’ decision recommendations impact humans’ decision accuracy in AI-assisted decision making, while explorations on the impacts on humans’ decision fairness are largely lacking despite their clear importance. In this paper, using a real-world business decision making scenario—bidding in rental housing markets—as our testbed, we present an experimental study on understanding how the bias level of the AI-based decision aid as well as the provision of AI explanations affect the fairness level of humans’ decisions, both during and after their usage of the decision aid. Our results suggest that when people are assisted by an AI-based decision aid, both the higher level of racial biases the decision aid exhibits and surprisingly, the presence of AI explanations, result in more unfair human decisions across racial groups. Moreover, these impacts are partly made through triggering humans’ “disparate interactions” with AI. However, regardless of the AI bias level and the presence of AI explanations, when people return to make independent decisions after their usage of the AI-based decision aid, their decisions no longer exhibit significant unfairness across racial groups.