I knew I should have paid attention in Economics class!

With that caveat, 2 thoughts: 1 is that commodity travel sales (airlines, etc.) are inefficient markets by design – with the goal of maximizing profit for the sellers, even if some seats remain unsold, rather than creating a single, perfect price per seat such that supply exactly meets demand and all seats are sold. So, having derivatives out there is a way of monetizing that inefficiency that it seems to me only enables it to persist (and perhaps have higher Beta if we get to the point of exerciseable options that convey rights on inventory).

That said, the second thought is that a robust derivatives market would, on an aggregate basis, add to the corpus of data and lead to a better collective view of what efficient market prices would be (per the “Delphi pool” comment above and general ongoing thinking about information markets). For example, if an airline has 10 seats left priced at $1000, and they sell 1, they don’t necessarily know if dropping the price to $800 would lead to 2 additional sales or 7. Though they could probably predict it reasonably well from historical data, having live marketplaces placing value on call options at different prices for those specific seats would create more visibility and basis for determining “actual” value even while they maintain their price discipline.

Good write up.