Algorithmic bias or fairness: the importance of the economic context – Catherine Tucker

MIT Sloan Distinguished Professor of Management and Professor of Marketing Catherine Tucker

From the Shorenstein Center

As a society, we have shifted from a world where policy fears are focused on the ubiquity of digital data, to one where those concerns now center on the potential harm caused by the automated processing of this data. Given this, I find it useful as an economist to investigate what leads algorithms to reach apparently biased results—and whether there are causes grounded in economics.

Excellent work from the discipline of computer science has already documented apparent bias in the algorithmic delivery of internet advertising [1]. Recent research of mine built on this finding by running a field test on Facebook (and replicated on Google and Twitter), which revealed that an ad promoting careers in science, technology, engineering, and math (STEM) was shown to between 20 and 40 percent more men than women across different age groups [2]. This test accounted for users from 190 different countries, with the ad displayed to at least 5,000 eyeballs in each country. In every case, the ad was specified as gender-neutral in terms of who it should be shown to.

When my team and I investigated why it was shown to far more men than women, we found that it is not because men use these internet sites more than women. Nor is it because women fail to show interest or click on these types of ads—thereby prompting the algorithm to respond to a perceived lack of interest. (In fact, our results showed that if women do see a STEM career ad, they are more likely than men to click on it.) Nor does it seem to echo any cultural bias against women in the workplace. The extent of female equality in each of the countries as measured by the World Bank was found to be empirically irrelevant for predicting this bias.

Instead, we discovered that the reason this variety of ad is shown to more men than women is because other types of advertisers actually seem to value the opportunity to get their ads in front of female (rather than male) eyeballs—and they’ll spend more to do it. Some advertisers’ willingness to pay more to show ads to women means that an ad which doesn’t specify a gender target is shown to fewer women than men. In essence, the algorithm in this case was designed to minimize costs and maximize exposure, so it shows the ad in question to fewer expensive women than what amounts to a greater number of relatively cheaper men.

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Are online news aggregators vampires? – Catherine Tucker

MIT Sloan Professor Catherine Tucker

MIT Sloan Professor Catherine Tucker

It isn’t often that an MIT Professor studies “vampire” like entities. However, that is exactly how news aggregators such as Huffington Post and Google News have been described by Mark Cuban of Shark Tank fame.

The reason that Mr. Cuban thinks that aggregators deserve dracula-like appelations is that as he expresses – “Don’t let them suck your blood. Vampires take, but don’t give anything back.” In other words if you produce content the work of such news aggregators is viewed as been purely parasitic.

However, in a recent study I have shown that aggregators are not the blood suckers of the media industry that some have thought they were.

The study focuses on the 2010 showdown between Google News and the Associated Press over digital aggregation of news content by the Google platform. In January 2010, after a breakdown in licensing negotiations, Google News removed from its platform all news articles by the Associated Press, a media consortium that produces and shares news stories among its media members, including both large and small newspapers in the U.S.

The dispute lasted only a few months, but it provided a terrific opportunity to gauge how online traffic is impacted by the inclusion, then exclusion, of aggregated online content on a platform.

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The monetization promise and pitfalls of Pokemon Go–Catherine Tucker

 

MIT Sloan Professor Catherine Tucker

MIT Sloan Professor Catherine Tucker

From TechChrunch

Pokémon Go has been downloaded more than 100 million times since its July debut, making it the biggest-growing mobile game ever.

Naturally, the phenomenon has drawn much commentary about what this means for marketing, but I am more interested in what it teaches us about making money.

It’s not easy to make money in an ecosystem from unrelated parties. In spite of all the press purporting that Pokémon Go offers local businesses unique marketing opportunities, there are, in fact, many limitations. The claim is that small businesses can gain new customers from being a Pokémon “Gym” or “Pokéstop” — physical locations that players visit to collect rewards or battle virtual monsters.

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Google Plus losing to Facebook: what it says about Internet privacy — Catherine Tucker

MIT Sloan Professor Catherine Tucker

MIT Sloan Professor Catherine Tucker

From Fortune

When Google joined the social networking space in 2011 with Google+, more than 25 million people joined in the first month. Now the number of true users on Google+ is less than 1% of the total 2.2 billion users on Google, according to a report by Stone Temple Consulting.

What happened?

Some of the decline may be explained by the fact that a Google+ profile was created automatically when people registered for Google. That alone would generate an impressive number of profiles, but wouldn’t necessarily lead to active use of the social media platform. According toForbes, just 6.7 million users have 50 or more posts ever, and only 3.5 million have 50 or more posts in the last 30 days.

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When selling virtual products abroad, don’t put prices on autopilot — Joey Conway and Catherine Tucker

MIT Sloan Assoc. Prof. Catherine Tucker

MIT Sloan Assoc. Prof. Catherine Tucker

From TechCrunch

If you have a physical product that you want to sell in more than one country, determining the price in different markets can be challenging. You might have to open an office in each country, or at least hire a consultant to assess local demand and analyze the competition.

But if you have a virtual product — say an app for a mobile phone — setting the price for it in different countries is easy. Using the individual exchange rate, the app store instantly will convert the price from your home country to any of the world’s many currencies.

This is, very likely, how prices are set for most smartphone applications sold in different countries. As developers prefer to spend time solving technical challenges, it is all too convenient to leave the responsibility of currency calculations and pricing to Apple or Google or some other virtual marketplace.

But is this the best approach when sellinginternationally? Is there a more profitable way to price virtual products sold in different currencies?

We explored these questions in an experiment that was both a real-world business trial and an academic exercise. We wanted to see whether we could boost revenue for a virtualproduct, Root Checker Pro, an app that helps Android users customize their phones. The app is sold through Google Play — the app store for Android devices — in more than 130 countries.

For our experiment, we selected six different currencies — Australian dollar, Canadian dollar, British pound, Mexican peso, Malaysian ringgit and Saudi riyal. Over six months, we charged various prices for the app in each of the currencies to see how sales and revenue would respond.

Read the full post at TechCrunch.

Joey Conway is creator and owner of Android app Root Checker Pro. He received his MBA from the Sloan School of Management in May 2015.

Catherine Tucker is a Professor of Marketing at MIT Sloan.  She is also Chair of the MIT Sloan PhD Program.