The Price of Imposing Vertical Equity Through Asymmetric Outcome Constraints

Vertical equity or fairness is an important aspect in many settings, yet has received relatively little attention the literature. Recent developments underline practical relevance (e.g., COVID-19 vaccination policies). It plays role performance evaluation of (nongovernmental) organizations. For example, donors might require a family-planning organization to allocate minimum fraction total utility (client volume) particular player (the “high-impact” subgroup population, e.g., young and poor clients). However, price (decrease client such requirements not well-understood. Consequently, this accounted for decision making. We provide analytical upper bound on (i.e., loss overall utility) vertical considerations resource allocation. assume that these concerns are expressed via outcome constraints, specifying percentage each player. Our set-up considers maker maximizing over general convex set, subject constraints. The applicable problems. results depend only high-level parameters therefore well-suited strategic conclude with two applications. First, we apply our instances health delivery. confirm constraints can entail substantial analyze factors driving close worst-case bound. Second, how help impact prioritization vaccine This paper was accepted by Jeannette Song, operations management. Supplemental Material: Data files available at https://doi.org/10.1287/mnsc.2021.4287 .