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Southwest to Stop Overbooking as United Uproar Echoes

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Re: Southwest to Stop Overbooking as United Uproar Echoes

#321

Post by Arizhel »

hueving wrote: post #218
zeroer wrote: post #129

Earlier quoted context omitted.

Yea, I agree the problem is not auctioning seats high enough. But the proximate issue is that United didn't offer cash, but $800 in United Fun Bux that are worthless for most people. The vouchers they were offering were only valid at dates United decided. The vouchers expired after a year. And they are offered in coupons for which you can only use one coupon per flight, and the excess value is lost. Practically all n…

Calling airline vouchers 'worthless to most people' is pretty stupid. The vast majority of the population would love to travel more and is constrained mainly by their budget. The proof of this is how Delta never seems to have problems and they constantly offer Delta dollars.

Most of the US population doesn't get very much vacation time from their employer. The problem isn't the cost of airfare (which is a tiny portion of the cost of any vacation compared to hotel, meals, rental car, etc.), the problem is a lack of time.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#322

Post by jessriedel »

gshulegaard wrote: post #320
jessriedel wrote: post #313

Earlier quoted context omitted.

> Price Discrimination increases Producer Surplus (thereby reducing Consumer Surplus). Price discrimination does not necessarily reduce consumer surplus. In this case in particular, there is a large surplus being created by the fact that planes fly more full, and I don't know any reason to think that consumers don't capture much or most of this .

I would be interested to see how you would graph price discrimination not reducing consumer surplus. Price Discrimination in itself is about redistributing surplus from consumer to producer. > a large surplus being created by the fact that planes fly more full I think you are conflating surplus with utility. Full flights have more utility than not full flights...but the market surplus available is unaltered. Maximizi…

I don't think you know what these terms mean.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#323

Post by gshulegaard »

jessriedel wrote: post #322
gshulegaard wrote: post #320

Earlier quoted context omitted.

I would be interested to see how you would graph price discrimination not reducing consumer surplus. Price Discrimination in itself is about redistributing surplus from consumer to producer. > a large surplus being created by the fact that planes fly more full I think you are conflating surplus with utility. Full flights have more utility than not full flights...but the market surplus available is unaltered. Maximizi…

I don't think you know what these terms mean.

Perhaps I am confused. It's been a little while...but do you have a better grasp/definition?

https://www.khanacademy.org/economics-finance-domain/microec...

http://www.economicsonline.co.uk/Business_economics/Price_di...

https://en.wikipedia.org/wiki/Utility

http://thismatter.com/economics/price-discrimination.htm

Re: Southwest to Stop Overbooking as United Uproar Echoes

#324

Post by munificent »

CamperBob2 wrote: post #73
munificent wrote: post #49

I didn't follow the doctor-getting-dragged-off debacle closely but I have a question about the basic mechanics of what went down: When I've been boarding on flights, they do the overbooking announcement at the gate and get volunteers to take later flights there, before people board. That makes a lot more sense because, in the event that no one volunteers, the airline can simply refuse to let certain people on. They d…

The important detail that everyone likes to ignore is that the flight was not overbooked. It was filled to capacity. Everybody who wanted to be on the flight was on the airplane. Then United decided to reaccommodate four seated passengers to make room for four employees who were needed elsewhere. Their contract of carriage allows them to kick you off under certain conditions, but that's not one of them. "Overbooking"…

Ah, that's interesting. That is a big fuck-up then.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#325

Post by jessriedel »

gshulegaard wrote: post #323
jessriedel wrote: post #322

Earlier quoted context omitted.

I don't think you know what these terms mean.

Perhaps I am confused. It's been a little while...but do you have a better grasp/definition? https://www.khanacademy.org/economics-finance-domain/microec... http://www.economicsonline.co.uk/Business_economics/Price_di... https://en.wikipedia.org/wiki/Utility http://thismatter.com/economics/price-discrimination.htm

> I think you are conflating surplus with utility. Full flights have more utility than not full flights...but the market surplus available is unaltered.

Utility is quantity that is measured with respect to an individual (subjective), whereas surplus is an objective measure. This is but one difference, and I am not conflating them. Fuller flights (less dead-weight loss) means there is more surplus to go around, and which will in general be divided up between the buyers and sellers.

I could say similar things about your understanding of price discrimination. My guess is that most of your confusion comes from thinking in terms of an idealized model where prices are dominated by marginal costs, whereas fixed costs for planes are very large.

This can all be inferred from the definitions you link to, you just haven't internalized them.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#326

Post by zeroer »

brewdad wrote: post #314
zeroer wrote: post #137

Earlier quoted context omitted.

The obvious answer is that plane ticket prices would increase. Some people wouldn't fly and some flights wouldn't fly.

So everyone is worse off? How is that an improvement?

I don't think it's an improvement. I'm just addressing the points of my parent.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#327

Post by manigandham »

Veratyr wrote: post #56
chmaynard wrote: post #16

Southwest Airlines has the best website, best checked luggage policy, best change policy, and now no overbooking. The big four domestic airlines all treat coach passengers like cattle, but Southwest is the least predatory. Edit: Also, consider that Southwest is very profitable despite the fact that they don't have first class or business class sections on their aircraft. Yes, passengers pay different fares. But as fa…

To offer a counterpoint, Southwest also offers the worst boarding procedure, unless travelling alone or with kids. My wife and I were going on vacation and it was impossible to get seats together as we were pretty far back in the assigned line positions and by the time we got on the plane, there were no two vacant seats next to each other. After landing we discovered that checking in at the right time might get us fu…

> worst boarding procedure

Their boarding procedure is selected because it's scientifically proven to be the fastest (out of the acceptable options). There are more exotic procedures that are even faster but people wont put up with them. Ideally you want back-to-front, outside-in, staggered sides, staggered rows to make it as parallel as possible.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#328

Post by wutbrodo »

kwhitefoot wrote: post #318
wutbrodo wrote: post #221

Earlier quoted context omitted.

> Corporations are getting preferential treatment by being allowed to sell services which they're not going to fulfill. Does the contract of carriage say the service they're selling is a guaranteed flight? Spoiler: No. I hate the air travel experience as much as the next guy, but for the life of me I can't understand the derangement that seems to take hold of people when they start talking about. All else held equal,…

Contracts are irrelevant here because there is no competition in that market, you have to accept the contract or walk to your destination. For contracts to be meaningful the parties have to be of comparable power and both parties must have the opportunity to choose a competing good or service. This is plainly not the case here.

Sure? Except that has nothing to do with what I was talking about. The irrelevant statement here is yours.

I was specifically rebutting the claim that airlines are getting "special treatment" [by the government] by being allowed to sell services they don't fulfill. The service they're selling is not "a guaranteed flight".

Words have meaning and facts matter, beyond "Airlines bad, pick a side". It's possible to think that they're anti-competitive and shitty without making entirely false claims about them (as the gp comment did).

Re: Southwest to Stop Overbooking as United Uproar Echoes

#329

Post by hueving »

ManlyBread wrote: post #223
hueving wrote: post #218

Earlier quoted context omitted.

Calling airline vouchers 'worthless to most people' is pretty stupid. The vast majority of the population would love to travel more and is constrained mainly by their budget. The proof of this is how Delta never seems to have problems and they constantly offer Delta dollars.

And then you have guys like me, who fly very rarely and only if no other options are available. Any voucher tied to flying is inherently worthless, because not only I've lost a lot of time but also the whole point of flying - being able to move quickly from one place to another - is defeated by the fact that I'm now stuck in the airport. To top that off, if this happened during a holiday it means I'm getting a bad de…

Then you wouldn't accept the bid. That's the entire point of an auction system.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#330

Post by hueving »

nommm-nommm wrote: post #274
hueving wrote: post #218

Earlier quoted context omitted.

Calling airline vouchers 'worthless to most people' is pretty stupid. The vast majority of the population would love to travel more and is constrained mainly by their budget. The proof of this is how Delta never seems to have problems and they constantly offer Delta dollars.

Vast majority of the population wants to travel more but, of all things, the cost of a plane ticket is holding them back? No, this is not true. I travel for pleasure about once a year. I can travel more if I wanted to, finances don't hold me back, but once a year is enough for me. Traveling for vacation is usually pretty fun but at the same time just stressful enough that I wouldn't want to do it more than once a yea…

You are very disconnected from a huge chunk of the US population. Traveling with a family of 4 to visit extended family on a popular period like Christmas or Thanksgiving (i.e. when typical middle class people get time off) will cost upwards of $2000 for a round trip flight a thousand miles away or so.
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