"A Better World Through Price Discrimination"
Everyone outraged by Spirit Airlines’ decision to start trying to charge an extra fee for people who want to use the overhead bins—including Chuck Schumer who seems to be aiming for a quasi-regulatory solution or else a way to get on camera—should consider Paul Krugman’s argument that price-discrimination in monopolist-dominated markets is socially optimal. Here’s page 280 of his economics textbook, part of Chapter 7: Market Structure Beyond Perfect Competition:
This is a somewhat counterintuitive result to most people, but the argument is extremely convincing. You’re never going to have air travel meet the textbook definition of a perfect competition (there’s not enough demand on most routes to support a large number of competing airlines) so business-process innovations that help airlines think up more precise ways of tailoring prices to specific elements of consumer demand help advance human welfare.