A reader over at Marginal Revolution spotted Delta’s new system where when you check in at the kiosk it asks you to bid on what it would cost to get you to volunteer your seat. Below the entry box it says, “Delta accepts lower bids first.” Genius!
With this method the airline doesn’t have to guess what might be the lowest bid passengers might accept and then try to auction it off. Let the travelers underbid each other and do the hard work for you.
Not only does it give Delta more information, it takes information away from flyers. They won’t be able to gauge the supply, and their individual value as a participant, as well because there’s likely to be that scene where they call out the bump seat offer over the intercom and everyone looks around to see if anyone is going to take it.
Putting “Delta accepts lower bids first” primes flyers to bid low so that they have a better chance of getting a voucher.
One would hope that the airline would pass on the savings from the increased efficiencies to the passengers in the form of cheaper fares. More likely is that it will be used to squeeze in more overbooking.
Going Once, Going Twice, Not Going for $150! [Marginal Revolution] (Thanks to Mick!)