Given the deep mess that United Airlines created for itself after a passenger was dragged off a full flight last week, Delta said it could increase the incentives for "voluntary denied boarding." Agents will now be allowed to offer up to $2,000 to entice passengers to give up their seats, significantly more than the previous limit of $800. If that doesn't work, the agents' supervisors can authorize payments of almost $10,000.
Delta's aim is clear: Use the price incentive to deal with oversold flights and, thus, avoid the social-media-fueled anger that would be sure to erupt again should there be another messy involuntary "reaccommodation" (as United initially called the incident).
On first sight, this approach is likely to work in reducing denied boarding situations for Delta, of which there were an estimated 1,200 in 2016. And once one major airline applies such a system, others are likely to follow (particularly major carriers such as American and United).
But what if insights from game theory — and, particularly, the greater potential for high collective payouts from credible collaborative collusion — were to inform passengers' reactions? They would consider ways to enrich themselves at the expense of the airline.
Here's an example: Once the airline calls for volunteers, those willing to respond would form a consultative group that would assign one passenger to miss the flight and then agree to collectively hold out until the airlines approaches its new $10,000 maximum. At that point, the one passenger would volunteer, collect the compensation, keep a good portion of it, and make smaller side payments to the other members of the group.
Of course, this is by no means a foolproof approach. Effective collusion and steadfast commitment are tricky for a plane full of strangers, especially when passengers arrive at the gate at different times and, after the flight, are unlikely to interact with their fellow travelers in future. The incentive for any one passenger to refuse to be a member of the group, or break away from it, is considerable — especially because there are no easy group discipline enforcement mechanisms.
