The logic of collective action: why airline tickets are non-transferable

Christopher Elliott wrote up this report exploring the reasons why airline tickets are non-transferable. Here’s fake reason #1:

Airlines don’t allow name changes for two reasons, according to Victoria Day, a spokeswoman for Airlines for America, an industry trade group. The first is airline policy. An airline needs to know who the customer is so it can “provide quality service,” she says …

Ha! Very funny … Ms Day has a real sense of humor! Now, here’s fake reason #2:

The second reason is security, or ensuring that the ticketed passenger is the same person going through the TSA checkpoint and getting screened.

Really? Enough of this nonsense … here’s the real reason why:

Warren Lieberman, an airline pricing expert and president at Veritec Solutions, says the more true part involves an airline’s ability to make money. If name changes were allowed, then passengers could resell their tickets anytime, subverting an airline’s ability to raise ticket prices as the flight becomes full.

Notice the logic of collective action in this case. Airline passengers are too diffuse as a group and have too little at stake per flight, so we don’t take the time to join forces in order to put an end to this exploitation. The airlines, by contrast, are few in number, well-organized, and have a lot to gain from this ridiculous and outlandish policy.

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About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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