I don't know the answer to your question, but I do know that there are people whose full-time job is dealing with the fallout of cancellations and over-booking.

I don't know the answer to your question, but I do know that there are people whose full-time job is dealing with the fallout of cancellations and over-booking. From my conversations with one of them I'd hazard a guess that it's more or less ad hoc and there isn't any kind of cleverly computed priority algorithm.