Southwest Airline’s Prisoner’s Dilemma in Passenger Boarding
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Is Southwest Early Bird Check-In Worth It?
One of the distinct features of Southwest Airlines is that passengers are able to choose their seat upon boarding on a first come, first serve basis. This means that during the boarding process, passengers are able to choose any available seat of their liking. This had been the standard boarding procedure until 2009, where Southwest Airlines implemented their EarlyBird Check-in system. The new system assigned boarding groups (A, B, or C) to passengers, which was also followed by a number (i.e. A1, B1, B2, C3, etc.) where earlier boarding groups and earlier numbers allowed for earlier boarding. Passengers were assigned the boarding group and numbers based on their check-in time, with priority given to those who paid an additional $10 fee (priced at $15 at present). The caveat of the EarlyBird fee, however, is that it does not necessarily guarantee a good/desirable seat; it only means that it checks the passenger in automatically.
In other words, this puts the passenger in a prisoner’s dilemma situation from which Southwest Airlines is able to profit off of. In this ‘game’, a traveler might consider their two choices: to pay $10 for a good seat, or to pay $0 for a lottery style seating. The prisoner’s dilemma is created by the nature of multiple people making this decision, thus competing for the best seat. The possible outcomes for considering two travelers competing for a seat are as follows: if neither pays the EarlyBird fee, both passengers can expect okay seats in the seating lottery. If only one of the passengers pays the $10, then that passenger will get a good seat. Lastly, if both pay the $10 fee, both passengers get placed in the lottery for seats, which is essentially the same as if they were to have both opted-out of paying the fee. The resulting table can be modeled as follows:
As we can see from the table, and as referenced from the article, the dominant strategy here is to pay the $10 EarlyBird check-in fee.
In reality, one traveler is competing with not just one other traveler, but with all other travelers on the plane. Thus the more travelers pay for the EarlyBird fee, the worse it becomes for those who do not pay for the fee. All this considered, it comes back to show that by nature of how the EarlyBird fee incentivizes travelers to pay for the fee, Southwest Airlines will make a profit in most situations. This is a win-win situation for Southwest Airlines, as foregoing assigned seating not only makes boarding more efficient, but it also maximizes the satisfaction of its passengers.