Why Airlines Pay You to Miss Your Flight

A flight is full. The gate agent offers $400 for someone to take a later plane. Nobody moves. Then the offer becomes $500. Then $600. The number stops moving the moment somebody stands up.The next time you hear an airline asking for volunteers at the gate, you'll notice the price moving — and know that you are watching an auction find its seller.▌│▌│ ▌│ ▌▌│ ▌│▌ ▌│ ▌▌│▌ ▌│ ▌│▌│IN THIS EPISODE— How airlines used to decide who lost a seat on an overbooked flight— How economist Julian Simon turned that decision into a voluntary market— Why putting a price on bumping passengers may have made overbooking easier to expandTHE NUMBERAbout 291,000 passengers voluntarily gave up their seats on U.S. airlines in 2024 — U.S. Department of Transportation, passengers, 2024SOURCESJulian L. Simon — Journal of Transport Economics and Policy, 1968U.S. Civil Aeronautics Board — oversales and denied boarding rules, 1978U.S. Department of Transportation — Air Travel Consumer Report, 2024▌│▌│ ▌│ ▌▌│ ▌│▌ ▌│ ▌▌│▌ ▌│ ▌│▌│Narration in this episode is AI-assisted.Research, writing and editorial judgment are human.Invisible Economics — The Systems Behind Everyday LifeNew episodes when they're ready.