We had a need to travel to Ernakulam from Bangalore at short notice. It was a week day, so buses were a possibility, but the first preference was train.

There were a number of trains that evening, but not unexpectedly no tickets in General and Tatkal quota. Then my attention was drawn to the radio button Premium Tatkal. I had never availed of this facility and I checked if any of the trains that I was interested in had this. Luckily for me, the Kochuveli train leaving at 5 PM that evening had it. There were 100-odd seats in Sleeper and about 22 seats in 3rd A/c in this quota!

I chose this option and tried to see what the price was. It just displayed the regular tatkal rates and said the final charges will be "dynamic"! And it was, when the ticket was finally booked - the Rs.435/- ticket costing about Rs.600/- It still beat travelling by bus and we could reach our destination peacefully.

A relative of mine (who had also availed of the same facility) asked how much I had paid for the Premium Tatkal. It was then that I realized that the rates could vary. As it turned out, she had paid Rs.725/- odd for the same ticket - that I had paid Rs.600/- for. She had booked a few minutes after I did. But the additional cost of Rs.125/- is a fairly large amount for the ticket cost of Rs.435/-

I searched the internet, but could get no information on the algorithm used to compute the dynamic rates.

There are two factors that I could see:

- the rates will increase as you reach the end of reservation period
- the rates vary based on the market demand (like airlines rates).

In the best case (if there is no demand, which is hard to imagine), the rate will be equal to tatkal rate. In the worst case, I believe it could be double the tatkal rate.

How these two factor interplay would be interesting. There is known demand for certain days (long weekends, eve of festive days) - for those tickets, would demand outweigh booking time and would higher rates start even at the start of the premium tatkal period? I would think so. Is it possible for these tickets also to run out during such days? If so, how many people would pay the maximum rate? Would there be contention for these tickets in terms of who books first and thus gets more benefit?

Tatkal itself was intended to address the need for last-minute travellers. It is debatable if there was a need to create a subset within this - tatkal itself could have had dynamic pricing!

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