Wait... what? They're making it so that overbooking will happen more often and so that people will get less compensation for being bumped from their flights.
I'm curious as to why you think that's good for me, the consumer? More "effective" pricing means that the price I pay will get closer to the maximum price I'm willing to pay. In short, it means that I'll pay more. The article discusses this, with the airlines taking away as much of the "consumer surplus" as possible--i.e. getting people to pay them more money.
I'm really, really confused right now as to why you think that having to pay more would make me want to fly more? Surely I would want to do things where the benefit to me is higher than the price, not where the benefit and price are as nearly equal as possible. After all, I can do only so many things, so the opportunity cost of doing that instead of something with more benefit (e.g. taking a road trip instead of flying, or taking a cruise at sea) makes flying a losing proposition all around.
The trick will only have the effect described in the article if the airline is a monopoly. With competition they won't be able to extract all the gains. So you will have to pay less, eventually, and profit from other people's willingness to get off an overbooked flight.
Remember: Overbooking is usually not a problem, since a few people don't turn up anyway.
Compare an English auction to a straight sell: In the latter, the supplier just guesses a price, and you can accept it or not, and unless they guess right, there will be surplus left. In an auction with multiple bidders who value the item in question at similar levels, the supplier doesn't have to guess. The bidders will make sure that almost all surplus goes to the supplier; essentially the winner will pay slightly more than the second highest bidder was willing to pay.
Still, auctions are good for buyers, if there's competition between suppliers.
If they actually lower their prices, yes, that would make me slightly more willing to fly. Though, actually, I'd prefer that they lower their absurd fees (and that all the places to compare flights would give us a way to add up all the fees up front in order to expose such shenanigans).
I don't really expect them to do that, though, even with this sort of setup. There would be little reason to get rid of a customer surplus if they planned to give it back to us.
If you're selling your ticket then it's not likely you'll be undercut since others actually want to fly. But if you're selling a willingness to be bumped to a later flight, I can see this scheme failing for sure.
Frankly, the more tricks like this they pull, the less I want to fly. At this point, I'm not willing to fly any more than is strictly necessary.