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How Much Is That Seat Worth? #356: Julian Lincoln Simon Papers

American Heritage Center
A page from the article “Origins of the Airline Oversales Auction System” from the journal Regulation, 1994. Box 78, Julian Lincoln Simon papers, American Heritage Center, University of Wyoming.

One of the risks of traveling by air is being bumped from an oversold airline flight. Before 1978, airlines had various approaches to addressing the overbooking problem.

United Airlines told its employees to bump the elderly and members of the military. American Airlines bumped people who had most recently bought tickets. And Eastern Airlines bumped passengers who had boarded but hadn’t yet had the chance to sit down.

All of these solutions led to dissatisfied customers and traveler horror stories. Economist Julian Simon had a better idea. He thought an auction could solve the problem. It took nearly twelve years, but eventually, the Civil Aeronautics Board approved the idea. Simon’s proposal is the reason airlines provide incentives to today’s travelers to give up their seats on overbooked flights.

See Julian Lincoln Simon’s papers at UW’s American Heritage Center to learn more about the problem of airline overbooking.

For more information, visit the American Heritage Center site.