Solving United Airlines’ Problem with Game Theory

Credit: Bloomberg Businessweek

The headlines today only offer more grim fallout for United Airlines after the horrific video of Dr. David Dao circulated on social media last week showing him beaten and dragged down the aisle by airport police officers. His lawyer says the medical toll consists of a broken nose, a concussion, two knocked-out teeth, and sinus problems that may result in the need for reconstructive surgery.

How’s that for flying the friendly skies?

This morning on NPR’s Morning Edition, they tapped into the science of game theory to see if there is a foolproof way to prevent this kind of incident from ever happening again. (Because it definitely needs to never happen again.) Before coming up with a solution, it’s important to understand the underlying cause, and it’s a practice that’s commonplace in most (if not all) major airlines: overbooking of tickets.

Think of it like this — you’re hosting a party and you’ve got room in your house for 25 people, but you send invitations to 30 people expecting that most of them won’t RSVP, let alone show up. It’s statistically favorable that you’re right, but then there’s that slim chance that all 30 people RSVP and then, crazy as it may be, all 30 people show up, and you don’t have room for them.

Eek.

Now you need to tell 5 people that they’re no longer invited. “Sorry, catch you at our next party, mmmkay?” Yeah, kinda awkward, right? The difference is that there are millions of dollars in annual revenue at stake for airlines that don’t fill their flights due to underbooking or no shows, which happens more than you might think.

This isn’t an illegal or unethical practice either. The Department of Transportation (DOT) even has guidelines that airlines must follow in the event of overbooking: Voluntary Bumping.

This is what happened on United Flight 3411 on April 9th. They overbooked but the passengers had already taken their seats and no one wanted to give theirs up, even with the promise of monetary compensation. Who can blame them? People have places to go and people to see.

When no one volunteered, the airline followed transportation guidelines, as specified by the DOT, and moved on to Involuntary Bumping, which is when a computer algorithm selected four seats, one of which belonged to Dr. David Dao, and, by now, I’m sure you know the rest of the story.

So how can game theory prevent this from recurring? During the Morning Edition story, they interviewed Kevin Zollman, a philosophy professor at Carnegie Mellon who studies game theory. He pointed out the most obvious solution if you understand human psychology: don’t let people board the plane first.

The airline knows it’s overbooked — people check in before boarding, so this is obvious before they even give people a chance to sit down and “own” a seat. As Professor Zollman said during the interview, “You tend to value something more once you have it.” That seat becomes your seat, and you don’t intend to give it up.

Simple solution: Ask for volunteers before boarding. Give them the option before they get the chance to feel any kind of ownership.

Additionally, the interview touched on how people respond in groups. People are apparently really sensitive to being thought of as a sucker, even among complete strangers. So when someone makes an offer that sounds pretty good, like $800 for their seat, Professor Zollman says “everyone looks around and everyone sees, well, nobody else is doing it, so I must be a sucker if I do it, so I’m not going to do it either.”

The solution? Don’t make the offer public by announcing it over the speaker system. We all get text messages if a flight is delayed or cancelled, so why not when a flight is overbooked? Send a text message to the passengers letting them know and then ask them privately to respond if they’d like to voluntarily get bumped for compensation.

Better yet, make a game out of it and up the stakes. Tell them in the text message that the first to respond gets $2,000 but the amount goes down after that for subsequent volunteers. You would have people privately fighting for that bump and no one gets hurt or angry. More volunteers and fewer, if any, involuntary bumps.

Out of all the “solutions” I’ve heard bounced around over the last few days, this interview was the only one that offered compelling, science-based solutions that would be all-too-easy to implement.

So how about it United? I don’t think your solution of not involving the airport police in future situations really deals with the underlying cause. How about make it so there aren’t any future situations at all?

Listen and read the full story here.