It's worth pointing out that the $200/$400 limits on IDB are very old, and have never been adjusted in real terms.

So, it was historically very costly to bump pax ($400 was a lot more money back then), but it has gotten cheaper and cheaper.

The economics of bumping are a little interesting (at least to an economist). As I understand it (but this is all second-hand knowlege), back in the old days of airline regulation, ticket prices were more or less set by route, with relatively little variation. Airlines competed on quality, rather than price. (hard to believe, now adays).

They did price discriminate, by way of offering student, military, and senior fares.

And when flights were oversold (which I think was much more common back then, because without the $100 change penalties people would make a reservation for the Tuesday and Wednesday flight, if they weren't sure which one they would take), the airlines tended to bump students and military.

So an economist says "Hey, this is inefficient. What if a student really needs to get to a job interview... we should be bumping the people who have the most flexible schedules."

Of course, you aren't going to get many volunteers if you kindly ask "anyone willing to wait three hours for the next flight," so an economist proposed a (reverse) auction: start by offering $100, then raise it to $200, etc., until you have enough volunteers. (To keep people from holding out, i think they tend to award everyone the maximum price...and its often not really an auction, but many of you muts have seem airlines up the rewards when volunteers were scarce).

So Milton Friedman, the great free-market economist, heard this proposal, and said "No, this can't possibly be a good idea--if it were efficient, the airlines would have done it already. And they are not doing."

But the airlines adopted iit, and Friedman later recanted his first statement.

(note: I believe the above is true, but i may have some facts/etc. wrong, so don't put this into your honor's thesis without checking the facts).