Basic Economics

Prices for a service can be more closely related to supply and demand than ever before. When I first started flying, published airfares stayed fairly constant. The industry may have been more regulated, so competition was probably not as cut-throat. Yet, a larger reason for stationary pricing was due to the fact it wasn't feasible to update frequently. Now, thanks to computer networks, fares can be adjusted from hour to hour.



I bought a ticket on these flights at the beginning of the month and paid just $489. Due to the announcement of special events in Puerto Vallarta, there undoubtedly has been a lot of interest in them. I wish I knew more about the pricing mechanism for airlines. I know that lots of Internet sites, such as Expedia, scrape the fare data directly from the airlines. The amount and progress of sales must be tracked and analysed. Pricing is mostly likely adjusted depending on the rate of activity and purchases. I wonder whether a few people, constantly checking a specific fare, can cause an algorithm to kick in and increase the price of a flight.

Today's quoted price is $221 more than what I paid. One never knows how much the passenger in the neighbouring seat paid.