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Comments (31)
My number, answer and thoughts were "How much do I gain for supplying a car, and how much do I lose for failing to supply an offered car?".
Yeah, if you're an airline, the number might be 105.
?
Airlines regularly oversell flights -- they might sell 105 tickets on a flight with 100 seats. They do that because people frequently don't show up for a flight.
Come to think of it, I'm not actually sure who does this. I've probably flown 100 times, and I can only think of one occasion where I've not taken a flight that I bought a ticket for. I guess I'm not the typical airline customer.
I think it's business customers who book flights they might not need, because it's easier to cancel/not show up than to book in a hurry.
A colleague of mine has on more than one occasion booked several different flights for the same journey, to give himself the flexibility to change his arrangements later. It worked out much cheaper than buying a more expensive ticket that allowed for changes.
For that matter, if you're 90% sure you're going to take the flight (which seems reasonable, considering there's not too many overbooked tickets), you still save money (in expectation) buying the ticket early, since tickets bought far in advance are cheaper.
So maybe it's the better calibrated customers who book flights they might not need.
Also, how much of a loss can I afford to take before going bankrupt. The lower my cash reserves are, the more I want to play safe.
I was hoping to abstract that away by not specifying "how much money".
I figured that you might have intended to include it, but thought that somebody might still benefit from it being pointed out explicitly.