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Perceived Fairness in Networks

Published: October 14, 2025 | arXiv ID: 2510.12028v1

By: Arthur Charpentier

Potential Business Impact:

Shows how unfairness feels to people, not just groups.

Business Areas:
Professional Networking Community and Lifestyle, Professional Services

The usual definitions of algorithmic fairness focus on population-level statistics, such as demographic parity or equal opportunity. However, in many social or economic contexts, fairness is not perceived globally, but locally, through an individual's peer network and comparisons. We propose a theoretical model of perceived fairness networks, in which each individual's sense of discrimination depends on the local topology of interactions. We show that even if a decision rule satisfies standard criteria of fairness, perceived discrimination can persist or even increase in the presence of homophily or assortative mixing. We propose a formalism for the concept of fairness perception, linking network structure, local observation, and social perception. Analytical and simulation results highlight how network topology affects the divergence between objective fairness and perceived fairness, with implications for algorithmic governance and applications in finance and collaborative insurance.

Page Count
13 pages

Category
Economics:
Theoretical Economics