What I'm talking about is this effect. Someone sues McDonalds for being burned by hot coffee. The company decides to avoid all the fuss and pays off $5000 for the person to calm down. Next week, hundreds people "get burned" by hot coffee and demand $5000 worth of compensation...
In this particular case, what could happen is, in cases of overbooking, people could start demanding a much larger compensation than 4x the original price. This kind of risks should be taken into account. I am not an economist and cannot assess the potential damage, but the company's specialists could.