How Game Theory Could Help With Overbooked Flight Problem
United Airlines promises to never again use police to forcibly remove passengers from overfull flights since the fiasco with a United Airlines’ passenger being dragged off a plane in April this year. This public relations disaster highlights a problem that airlines always face: how to entice people to give up their seats voluntarily. As seen from the article, some top thinkers in the world of ‘game theory’ say they think the industry could be doing a much better job if the problem could be treated as a game and also offer some solutions and explanation.
The first solution they suggest is ‘Don’t let passengers board the plane and then take their seats away. And if you do, offer them a lot more money.’ This means to control the timing of solving the problem. Once people sit down, they are likely to think the seat of their own; it would require more to ask people to give up it on plane than in the airport terminal. The second one is ‘Don’t make the offer in such a public way, because nobody wants to be a sucker.’ Humans are sensitive to being suckers. If they are offered a choice of giving up the seat for $400 in public and find nobody else is responding this offer, they may think becoming a sucker doing it and refuse to give up the seat. In this case, asking them how much they would want in exchange during check in should be a much better approach. The third one is ‘Make better use of technology and start with a big offer.’ Professor Zollman suggests it could get more passengers in on the game and willing to play if they started with a high offer and worked down from there. The going-down price is likely to get people engaged in the process and active from the beginning and let people not feel like now it’s a competition with airlines, which may result in the airlines getting more volunteers. Another advantage of starting form a high price is that it would help airlines to know who cannot give up the seat. People who do not consider a lot of money in exchange for their seat probably really need to get to their destinations on time. Those are passengers airlines don’t want to drive away if they have other choices.
As studied about Game Theory in class, the 2 players in problem above are the airline and every single passenger. This appears as exactly a game theory-type problem in which the airline wants some people to get off the plane and every single passenger on the plane wants to stay. In this case, United Airline did not play this game very well when the game ended up with a passenger being dragged down the aisle by violence. Applying game theory on the 2 players, the airline as player 1 should use the information they get from the game to make better choices, in terms of the timing, occasion and way they offer the exchange. Since Game Theory analyzes the outcomes of decisions of one player with respect to the decisions made by the other player, here, airlines managing pieces of information of every single passenger in the game could be a key to help with the United Airlines fiasco.
Source：http://www.npr.org/2017/04/13/523726313/how-game-theory-relates-to-airline-booking