TED-ED: Why do airlines sell too many tickets? - Nina Klietsch

The video discusses overbooking, a practice where businesses sell more than their capacity to optimize resources and increase profits. Airlines are a common example, using statistical models to predict no-shows and maximize revenue. The video explains the calculations involved, including the use of binomial distribution to assess probabilities and expected revenue. It also addresses the ethical concerns of overbooking, questioning the balance between practicality and ethics.

What is overbooking and why do businesses engage in this practice?

How do airlines determine the number of tickets to sell for a flight?

What statistical method do airlines use to predict passenger turnout?

What are the potential financial outcomes for airlines when overbooking occurs?

Discuss the ethical implications of overbooking in the airline industry.