Performative Prediction: Past and Future

Predictions in the social world generally influence the target of prediction, a phenomenon known as performativity. Self-fulfilling and self-negating predictions are examples of performativity. Of fundamental importance to economics, finance and the social sciences, the notion has been absent from the development of machine learning. In machine learning applications, performativity often surfaces as distribution shift. A predictive model deployed on a digital platform, for example, influences consumer behavior, thus changing the data-generating distribution. We survey the recently founded area of performative prediction that provides a definition and conceptual framework to study performativity in machine learning. A consequence of performative prediction is a natural equilibrium notion that gives rise to new optimization challenges. Another consequence is a distinction between learning and steering, two mechanisms at play in performative prediction. The notion of steering is in turn intimately related to questions of power in digital markets. We review the notion of performative power that gives an answer to the question how much a platform can steer participants through its predictions. We end on a discussion of future directions, such as the role that performativity plays in contesting algorithmic systems.