Fair Decision Thresholds!?
In the following two charts, the data from the two population groups is displayed separately. As a policymaker or societal decision-maker, your role is to define the rules under which banks may operate when granting credit. This includes whether banks are allowed to set different decision thresholds for different groups—or must apply a single, uniform threshold to all applicants.
Discuss whether you would choose different decision thresholds for each group or a single threshold for both groups.
Decide what you consider to be fair decision thresholds for the two groups that protect individuals from systematic disadvantage while also enabling the bank to operate sustainably.
Write down your answers to the following questions:
- Which thresholds have you chosen for the two groups of people?
- Which statistical measures were important to you when choosing the decision thresholds? Why did you find these measures important?
- How did you determine your decision thresholds based on these measures?
- Argue why your thresholds are fair for both groups of people.
The threshold(s) is/are fair because ...