Equity by Design? On the Trade-Offs in Fairness-Driven Recommendation in Heterogeneous Two-Sided Markets

Abstract

Two-sided marketplaces embody heterogeneity in incentives: producers seek exposure while consumers seek relevance, and balancing these competing objectives through constrained optimization is now a standard practice. Yet practical platforms face interacting sources of heterogeneity that are often studied separately: multi-item recommendation, heterogeneous consumer groups, and business constraints beyond raw relevance. In this work, we present and study offline optimization framework for analyzing these trade-offs in an unified manner, extending prior two-sided formulations to represent more realistic discrete multi-item recommendations. Within this framework, we couple producer-side exposure guarantees with a consumer-group fairness objective and explicit business-oriented constraints. Our experiments show that the previously reported ``free fairness'' regime from highly stylized single-item recommendation settings disappears once each consumer receives multiple recommendations, and that moderate producer-fairness constraints can improve simulated business metrics by diversifying exposure away from saturated producers. We further show that reduction of inter-group disparity, preserves competitive overall utility.