Algorithmic bias in machine learning-based marketing models

Abstract

This article introduces algorithmic bias in machine learning (ML) based marketing models. Although the dramatic growth of algorithmic decision making continues to gain momentum in marketing, research in this stream is still inadequate despite the devastating, asymmetric and oppressive impacts of algorithmic bias on various customer groups. To fill this void, this study presents a framework identifying the sources of algorithmic bias in marketing, drawing on the microfoundations of dynamic capability. Using a systematic literature review and in-depth interviews of ML professionals, the findings of the study show three primary dimensions (i.e., design bias, contextual bias and application bias) and ten corresponding subdimensions (model, data, method, cultural, social, personal, product, price, place and promotion). Synthesizing diverse perspectives using both theories and practices, we propose a framework to build a dynamic algorithm management capability to tackle algorithmic bias in ML-based marketing decision making.