Earlier quoted context omitted.
a bit more complicated. I believe what I read was United knows the cheapest tickets on the flight are $200. They know DOT mandated compensation for involuntary bumping is 4x cost of ticket. Hence, its not worth it to them to offer more than $800 in compensation as they can just bump people involuntarily for the same value. Demonstrating why the DOTs rules for involuntary bumping create perverse market incentives re o…
>Demonstrating why the DOTs rules for involuntary bumping create perverse market incentives re overbooking. Without the law, United wouldn't even have to pay 4x. The remedies for regular breach of contract aren't very good.
i.e. airlines are only allowed to purposefully overbook due to DOT rules, the same rules provide what I perceive as a perverse incentive when it comes to encouraging involuntary bumping.