Cheddar News breaks down what surge pricing is and how it works as a variety of businesses are taking notes from models long used by airlines and ridesharing companies to boost profits.

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Cheddar Reports: Surge Pricing -- What Is It and How It Works

Most Americans are familiar with surge pricing for things like airline tickets and ride sharing their dynamic, often moving prices. But now more industries are charging based on demand, meaning that consumers could end up paying more at restaurants, movie theaters, even bowling alleys. The news, senior reporter Chloe Aiello helps break down the phenomenon. Take a look. A variety of businesses are starting to take notes from models long used by airlines and ride sharing to increase profits. According to a report from the Wall Street Journal, Americans have started to notice a surge pricing for everything from concert tickets and seats in a movie theater to restaurant menu items, fitness classes, golf games and even bowling surge pricing, which is also known more euphemistically as dynamic pricing is the practice by which industries adjust costs consistent with demand. So the more people that want something at the same time, the more expensive it will be. One example from the journals report is from a family in Petaluma, California who was quoted just under $420 for a two hour game of bowling on two lanes. They were attempting to go bowling at three p.m. on a Thursday a few days prior to New Year's Eve, the cost for an average Thursday at three at the same bowling alley was just over $200 about half the price. Another high profile example was Taylor Swift's eras tour ticket fiasco. There were all A lot of problems with that situation like ticketmaster's massive monopoly, but the New Republic also pointed a finger at dynamic pricing during the incident which swift actually had to approve of in advance. This allowed tickets to go from anywhere between $49 and $499 for those tickets based on location and yes demand. Now other artists like the cure have announced that they will not use dynamic pricing on an upcoming tour. That's according to the Wall Street Journal. You might be wondering why companies are using this while in some instances, it is practical in more decentralized companies like Uber or Lyft. For example, search pricing can be used to motivate more drivers to get on the road when demand outstrips supply. Another reason is that more companies have more data than ever before about their consumers and their preferences. Robert Chomsky, a professor at Dartmouth College's Tuck School of Business told CBS that the affordability and availability of algorithms these days gives more companies the ability to utilize this technology and finally anecdotes of an exorbitant bowling game. Aside, there is broader acceptance of this. Chomsky told CBS that more people have grown more accustomed to the idea that prices change over time. So that idea is spreading into less traditional industries. Now, for consumers, surge pricing can be beneficial at times because in some cases, exorbitant pricing one day might subsidize cheaper pricing the next. And that means sometimes you'll see airline tickets and find the occasional deal. But it also makes planning much more difficult as those attempting to book a fitness class or make a restaurant reservation. Might not know whether they'll find a cheaper price. Another time. Plus Americans trying to save might have to miss out on special occasions or making a reservation at a time that works for them. But one power that consumers do have in this market is using their dollars. If customers don't like the idea of surge pricing, they can always take their money elsewhere. All right. Thanks to Cheddar News is Chloe a yellow for that report.