Dynamic Pricing is all about adjusting your prices based on the market demand.
Usually that means, if the demand is high, the price goes up. If demand is low, the price goes down.
Airlines are the masters at this.
Many airlines let you pay a bit extra for an upgrade after you actually board the plane. This makes sense for the airline because at that point, an on-board upgrade is the only chance they have to sell an empty seat.
But the process is often limited by the passengers who have already paid for the higher category seats. If an economy passenger can end up in a business class seat on the day by paying significantly less than that business class passenger paid in advance, the airline will have a very unhappy business class passenger.
But what if the airline went ahead and sold those on-board upgrades, at the discounted price, and then gave the full fare paying business class passenger a rebate? Now, both passengers are happy.
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