Just to add to this, it is as a previous respondent said; on every flight there are a proortion of pasengers who dont show up on the day. Many of these are people who had flexible tickets so the airlines have unpaid for empty seats, others are arriving on a transfer flight which arrives late, and miss the onward flight.
Most airlines are VERY good at this, and have very accurate profiles for every single flight on how many people will show up, so it is generally very rare for the flight to actually end up with too many passengers for seats- so you'd never know it was happening.
Occassionally with very busy times, the profle doesnt quite work, often because a flight on that airline or another has been cancelled, and passengers moved to a different flight. This is when they offer the compensation schemes..airlines prefer to find volunteers than force people involuntarily.
Just to give you an idea, on one New York JFK flight, economy was regularly overbooked by -35 passengers, and regularly departed with 20 seats spare, so over 50 people would regularly not turn up.
So unless the airlines did the overbooking, the ticket prices would have to go up by huge amounts to make up for the missing passengers.
Hope that helps!