MP : Here s what I find exploitative and fundamentally unfair: The Las Vegas Review-Journal reported

Robert Reich was relieved that he was a passenger on one of the last flights to leave NYC before the airports closed on Monday.  But he s upset that the airline had jacked up ticket prices to $4,000 for the last flights leaving hotels in benidorm spain NYC for California.  Even at $4,000 hotels in benidorm spain per ticket, the flight was oversold by 47 passengers, and the airline then paid 47 volunteers $400 each to take a later flight, whenever that might be. In his own words, Professor Reich explains:
Assuming that the 47 extra passengers had each paid $4,000 to get onto the plane at the last minute, and the 47 who gave up their seats for them received hotels in benidorm spain $400 in return, the trade would have been "rational" hotels in benidorm spain in narrow market terms. After all, the seats were "worth" $4,000 to those who bought them at the last minute, and switching to the next flight (whenever that might be) was "worth" hotels in benidorm spain $400 to those who agreed to do so.
I couldn't help think this was a miniature version of the America we'll have if Mitt Romney is elected president. Rational hotels in benidorm spain and efficient in terms of supply and demand, guaranteed to maximize profits, but fundamentally unfair.
MP : Here s what I find exploitative and fundamentally unfair: The Las Vegas Review-Journal reported in 2002 that Reich is in the Washington Speaker Bureau hotels in benidorm spain s top-fee category, among 28 speakers who garner one-time speaking fees of $40,000 hotels in benidorm spain or more , and he therefore is able to net huge personal profits for his 30-minute hotels in benidorm spain talks (or less than 15 minutes for the talk in Las Vegas at the UNLV Foundation, according hotels in benidorm spain to the Las Vegas paper).
OK, actually, hotels in benidorm spain I think it s great that Professor Reich uses market-based pricing for his speeches, and I applaud him that he can charge $40,000 speaking fees (according to the Las Vegas Review-Journal) based on market demand for his time, but then he really shouldn t complain when an airline uses market-based pricing to allocate scarce seats on a plane when demand is high during a natural hotels in benidorm spain disaster.
And if Reich thinks hotels in benidorm spain that the market for giving speeches is an example of a market that is guaranteed to maximize his profits as a supplier of speeches, but is fundamentally unfair, because his prices and profits are so high, then I would challenge him to reduce his speaking fees significantly to a much lower, and much more "fair price."
Update : In an email, Robert Reich writes that he has no connection to the website in my original post that reported his speaking fees range between $37,500 and $100,000, and he requests that I report that I cannot verify that website s information about his speaking fees. In the revised post above, I have removed the references hotels in benidorm spain to that website, but have added a link to an article in the Las Vegas Review-Journal that reported in 2002 that Robert Reich s speaking fee was $40,000 or more.   However, because that was ten years ago, I cannot confirm that the $40,000 speaking fee is accurate today; obviously it could be more, or it could be less.
But in actuality most of the seats on that flight were probably sold at weeks previously for under $500.00. I d imagine his seat was first class and bought at the last minute. Those seats are always high priced.
and yet, I m sure that Mr. Reich didn t give up his seat. If he is so concerned about fairness, shouldn t he have used some of his excessive wealth to pay for the less fortunate who couldn t afford hotels in benidorm spain teh $4,000 seat?
Airlines oversell flights because it is unusual hotels in benidorm spain for everyone to show up for a flight. If Robert hotels in benidorm spain Reich wanted to do that with his speeches, he s free to do so. None of that has anything to do with what Andy is saying.
BTW, you do understand that to make your Reich analogy accurate, he would not only have to pay to bump people who want to waste time listening to his drivel from the oversold event, but he would also have to provide a seat for them at a future event.
This is classic free-market failure not market-based pricing because of asymmetrical information. Do you think the 47 passengers who gave up their seats knew the airline was selling them for $4000? Would you volunteer to sell your seat for $400 if you knew its current value was $4000?
As usual you attacked me instead of attempting to answer my question. I ll ask again, did the passengers who voluntarily sell their tickets for $400 know their tickets were being sold for $4000? If no, look up asymmetric information market failure. The airlines certainly knew of the $4000 price. If the volunteers knew, why not hold out for more money or other consideration? If you want to declare a free market, hotels in benidorm spain you have to play by the market failure rules that define it.
It doesn t matter. You don t seem to understand that airlines aren t obligated to provide any compensation at all to passengers who are refused boarding for certain reasons, including a natural disaster. The compensation offered to people for voluntarily giving up a seat is merely the cost of keeping customers happy and smoothing the process of bumping passengers. The customers who really need to get where they re going today have a higher probability of getting hotels in benidorm spain there and the customers who are more flexible or for whom the money or other consideration is worth more can opt for that.
If nobody volunteers, then the airlines have a protocol by which they force people to give up their seats. The compensation is merely an act of goodwill on the part of the airline. So, there s nothing for passengers to hold out for.
Not that it s in any way relevant hotels in benidorm spain here, but there is no information asymmetry. Anyone who cared to know what a ticket hotels in benidorm spain on their flight was going for could have found out by using a ubiquitous smart phone to access that information on the internet. It s so easy even Robert Reich could work out how to get at it.
Exactly what am I buying when I pay money for an airline ticket? I ll grant you that voluntary bumps with compensation are almost free market (as long as the airline allows me to sell my ticket they were going to sell for $4000 to the same customer for say $3000). Anyone who supports selling sports tickets for above face value should support hotels in benidorm spain this.
Nobody should be involuntarily bumped from a flight they have already paid for because someone offers more money after the initial hotels in benidorm spain sale. The bidding process has to stop sometime, and I personally think it should be when the money changes hands. If I already have a sheet of plywood in my truck that I paid Home Depot $20 for they should not be able to forcibly take it back from me in their parking lot and sell it for $100 to the next guy that comes along.
First of all, only about 0.001% of all passengers are bumped in any given year. Second, not all passengers hotels in benidorm spain view it negatively. Almost 20 years ago I worked for a guy who almost always volunteered to be bumped when the opportunity presented itself on our many business trips because he could get compensated for taking the next flight and just finished hotels in benidorm spain his work on his laptop while he waited. Win-win.
I found out I m wrong about the compensation for involuntary bumping it s now mandatory, but the caps are low and airlines were compensating people long before the FAA, in an effort to convince the feeble-minded it s working on behalf of passengers, made the compensation already extended by airlines mandatory.
Although I fly reasonably often, I don t work for an airline, so my understanding of bumping is not that deep. John Dewey would be a better source for such details. From what I understand, at most airlines people who check into their flight later have a higher probability of being involuntarily bumped, if it comes to that. It doesn t have anything to do with grannies and deep pockets. The airline will always ask for volunteers (something they were doing long before the FAA made that mandatory in another show of political expediency). If not enough volunteers materialize, the involuntary bumping begins hotels in benidorm spain according to a set protocol and not the depth of airline passengers pockets.
Unfortunately, in part because of the Patriot Act, passengers hotels in benidorm spain can t sell their tickets to each other. In principle, though, I agree with you; passengers should be able to resell tickets. And I do believe that you can compensate a fellow passenger in exchange for him voluntarily giving up his seat to you if you re involuntarily bumped. Again, not certain, but I believe I ve seen that done.
You re paying for the airline for a flight. HOWEVER, you are not guaranteed arrival or departure times. Depending on the circumstances, the airline may or may not have to compensate you for arrival and departure times hours and days different from what s on your ticket.
We allow airlines to overbook because there s usually a substantial number of no-shows and people are rarely bumped even on oversold flights as a result. If you re a passenger, the willingness to overbook is good for you. Imagine if you really needed to get somewhere and the airline refused to overbook, but there were 15 people who bought tickets and didn t show. The flight would leave with 15 empty seats one of which could have been occupied by you but isn t. Since there is usually hotels in benidorm spain a significant number of no-shows on most flights and only 0.001% of passengers are ever bumped, it s better for passengers and the airline to overbook hotels in benidorm spain as a matter hotels in benidorm spain of policy.
I m all for getting everyone on the plane who wants to fly and fill up all the seats. hotels in benidorm spain Thank you for your explanation. I only fly a couple of times a year, and I never have what I consider a problem. I fly to Florida now for less than I did in the 1970s, and that s not in inflation adjusted dollars. Deregulation is great.
If the passengers who are voluntarily bumped are happy, I guess there is not a problem. I would not hold that up as a perfect free market model since they can realistically only sell their ticket to one person (the airline) hotels in benidorm spain who sets the price and the airline can sell it to multiple high bidders. I would think the involuntarily bumped passengers should themselves hotels in benidorm spain be able to accept or reject the high bid for their se