Efficiency, Equity and Fairness

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Efficiency, Equity and Fairness
in Travel Technology

Prof. David Bernstein
James Madison University

Computer Science Department

bernstdh@jmu.edu

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Motivation

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With Heterogeneous Populations:
- Dissimilar people may have different access to technologies
- Dissimilar people may be impacted differently by the same technology
With Homogeneous Populations:
- Similar people may be treated differently by the same technology

Why Does this Matter?

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Public Sector Involvement:
- The government plays an important role in many travel technologies and it should "act for the public good" (which may be difficult to define)
Acceptance by the Market:
- Ignoring these issues may cause people to reject the technologies
Social Responsibility:
- Societies may only be able to succeed if their members worry about these kinds of issues

Framework for Analysis

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Efficient Policies
- Social welfare is increased (a utilitarian concept)
- Kaldor-Hicks criterion
Equitable Policies
- Nobody is worse off (an egalitarian concept)
- Pareto criterion
Fair/Superfair Policies
- People would rather have what they have than what others have
- Baumol's envy criterion

Can You Think of Examples of the Following?

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Look Good but Actually Inefficient:
- Technologies that you might think a priori would make things better, but actually make things worse
Efficient but Inequitable:
- Technologies that do make people better off in total, but make some people worse off
Efficient and Equitable but Unfair:
- Make people better off in total, make nobody worse off, but make some people envious

There's Always More to Learn

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