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The United Airlines Fiasco: How Game Theory Could Help

In a recent controversy regarding the situation with United Airlines and an Asian man being dragged off, many researchers and theorists have agreed to the idea that the idea of game theory could help in preventing future situations similar to this one. Professor Joshua Gans of the strategic management at the University of Toronto stated, “Yea, this is exactly a game theory-type problem,” in order to provide a feasible solution to a ubiquitous problem amongst airlines.

Oftentimes, airlines overbook a flight in the case that there are some no-shows. However, in the case with the United Airlines flight that had all passengers attending, there were no seats available but a couple of irritated customers who expected to be on that flight. This is exactly the type of problem that game theory could address and try to solve: airlines need some people off the plane, but every single person on the plane wants to stay on absent anything else changing. Furthermore, we see that with the recent situation with a passenger being dragged, bloodied, and screaming down the aisle that United airline did not handle this situation well. Therefore, the researchers in this article came up with a few possible ways game theory could handle the situation better.

  • Don’t let passengers board the plane and then take their seats away. And if you do, offer them more money.
    1. Once a passenger sits down in his/her seat, it is necessary to offer a passenger a lot more money than what he/she paid for to remove the passenger and satisfy both party needs.
  • Don’t make the offer in such a public way
    1. People often do not wish to be judged in the eyes of others. Therefore, when airlines offer for example a certain sum of money for their seats, passengers often do not want to be “the one” that takes the offer
  • Make better use of technology and start with a bigger offer.
    1. In this case, the airlines can also make use of the descending bid strategy. In this solution, airlines may text all passengers a high sum of money, to begin with, garnering attention from many passengers. This way, it is more secretive and people do not fall under the pressure of others’ judgments. Next, you continually bid down from let’s say $2000 to $1500 etc. so that you are finally left with one person who is willing to give up their seat for a certain price. This strategy allows the airlines to find a seat for all passengers, leave the passenger who left satisfied and also pay an amount of money that is lower than what you could pay if you just offered a certain sum of money.

 

By using these 3 strategies, airlines can consider that by applying these strategies, they could ameliorate the ways they handle situations to prevent future United Airlines situations with passengers. I believe that these are very ingenious ways to apply game theory in real-life situations. I especially agree with the last suggestion because of the way descending bids can be beneficially for both parties. It allows the airlines to not use as much money as they would need to with a single-price bid and also the competition amongst other passengers can bring the amount they would pay lower and lower. It was very heartbreaking hearing the news of the Asian man being dragged off the plane especially because I am Asian myself and I think that once airlines start utilizing these strategies presented, further controversy will subside.

 

 

http://www.npr.org/2017/04/13/523726313/how-game-theory-relates-to-airline-booking

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