Firstly, thanks for the input. Secondly, apologies if the response below is repetitive. I'm both trying to address issues you've raised and clarify my point ad nauseam.
Let me begin by saying that further retrospective investigation of ticket prices following my booking was not made as part of a masochistic endeavour nor was I actively seeking to find fault with the airline but rather it was an attempt to finalise the flight details of other members of my party who could not previously commit to flights that I had booked. It was only then that I noticed how prices had risen for a few short hours before settling back into a steady more steady pattern.

From your responses I see that some people do indeed think that the airlines monitor individual searches and adjust price accordingly for the individual consumer while others think this to be utter nonsense. Lacking feedback from industry insiders, whether they be people responsible for creating and maintaining the reservation systems or people involved in the fare structuring process, I'm still unsure how the system works. I have to say that my natural inclination is to shy away from the 'conspiracy theories' while not being surprised by anything people, firms and governments may do.
An attitude of resignation that 'that's simply how it is nowadays' or advice to check prices, buy a ticket and ever look back don't satisfy the inquisitive. When somebody wants to know why the sun always rises in the east one isn't content with a 'that's just the way it is' answer, right?

Though not in the computer field myself, as someone who is surrounded by, and has gained insight from, professional tech wizards on a daily basis, I do accept that in purely technical terms it is extraordinarily easy to keep track of a person's activities on a particular website. An airline does not need to be the NSA to do this. As mentioned above, their sites readily remember the route and dates you wish to take and record this information in order to make use of their site customer-friendly. On a more general level, take some time to read the privacy policies of various websites. They go to great pains to explain to you what identifying information they do not collect simply because it actually IS very easy to automatically collect and log a variety of data from people entering a website. Additionally, the information we ourselves request to receive over the web can be increasingly personalised without placing any strain on the systems of the firms or bodies providing such services. In order to do this, they collate a great deal of information about our web-surfing habits (and again, I'm not making a judgment about whether this is positive and acceptable or not). Make a purchase or simply go searching for goods on Amazon and for a few weeks or months after your entry into their site they send out e-mails with information on items similar or complementary to the products you viewed on their site. For a much longer period, they will show you similarly complementary items whenever you simply enter their site. This personalisation of the web experience is very common. So that airlines CAN track individual activity is less of an issue than the question of 'DO they?' I'm genuinely in the dark about this and seeking answers and opinions but more on this a littler later.

To address other concerns raised in some responses: I'm not a complete novice to travel and did indeed conduct extensive research both online and with a flesh and blood travel agent before settling on the airline and routing. The specific Lufthansa route was the one that suited me in terms of dates and pricing with no concern for mileage accruement. It was only then that I concentrated on the Lufthansa website, going in and out of the site multiple times during the course of a week or so to determine how the various routes they offered and how the specific route I was interested in fit in with onward travel plans on other carriers. During this time I did continue to check with other sources from time to time just to make sure that nothing 'better' suddenly popped up. So I did my 'due diligence' and focused on Lufthansa flights after cross-checking multiple sites, airlines and personal needs.
I did not intend to raise the issue of price variations across different websites, whether they be aggregator websites or the websites of travel agents. My specific concern is solely with extreme short term (i.e. over a few hours) price fluctuation found on the Lufthansa website.

I fully accept that fixed supply and variable demand affect pricing and am not surprised at, and do not begrudge, the person sitting next to me who paid a different fare. I understand the nature of fare classes ('buckets') and I know that as part of their yield management airlines use dynamic pricing to sell seats. By its very nature this dynamic pricing process is 'discriminatory' (not using this term in a negative sense by any means. Simply mean it makes fine distinctions, differentiates) precisely because it is primarily driven by customer dynamics. So an airline would have every incentive to accrue as much information about customer activities on its website as it can in order to adjust its fares according to demand velocity. The technology available today means that the airline can easily gauge variations in demand across the board as well as on an individual basis. Indeed, it is the collective material gathered about many individuals that create the broader picture for the airline. Separating individual information about customer habits from collective habits is a simple task. So to the question of whether I really think Lufthansa collects data from each person that enters their site: yes, I think they do. The mass of data collected from individual activities on their website is exactly what drives the dynamic pricing system. Question is, is the system also dynamically responsive to individual activities?

Relatedly, doesn't it make sense that dynamic pricing discrimination becomes more advantageous as the probability of selling out classes of seats increases? Less seats overall or less seats in a particular price bracket/'bucket' leads to higher prices, leads to even greater booking velocity, leads to increased or steady ticket prices until just before a flight when prices may drop precipitously in order to fill seats or rise incredibly in order to take advantage of customers needing those flights. But what explains a hefty price rise over only a few hours, followed by a return to 'normalcy' and even a dip in prices over the longer term? This makes perfect sense if dynamic pricing is personalised based on an individual customer's projected booking potential. Not so, if it's not.
As I wrote in my original post, if Lufthansa were to tell me that by pure coincidence at the same time as I was about to order tickets, they had briefly entertained the idea of using a smaller aircraft on my preferred routes with a decreased seating capacity but that hours later they had returned to the original aircraft for that route, or that tens of others were also booking the same flights and that mere hours later tens of people had decided to cancel those reservations, I would understand that the vagaries of supply and demand – which in theory is what by dynamic pricing seeks to reflect, gauge, regulate and take advantage of – had caused a coincidental short term price hike. This may have been the case. As I wrote, I'm not looking for a conspiracy or accusing the airline of price gouging. However, at the very least, the scenario of personalised/individual pricing does seem as equally likely as the explanation that I was simply unlucky in timing…..and that still doesn't explain what exactly occurred in those few hours to cause the system to raise and then lower the price of my particular route.

Airline seats are both fixed and perishable goods so fares should systematically rise as overall price sensitivity of consumers declines the closer you get to departure date or whenever there is a registered increase in booking velocity. Airlines take advantage (i.e. respond) of this by structuring their fares dynamically. Fair enough. However, do – not CAN – they structure fares solely across the board equally for all customers, or do they tailor fares on a more individual basis based on the information they accrue from a person's activity on their site?
The airline pricing policies are incredibly arcane and opaque. Technologically, it is very simple to tailor price to individual consumers based on consumer behaviour on their sites. Do airlines do this? Is it ethical? Is it legal? It certainly doesn't seem fair if – again, IF – they do this. Moreover, why should customers simply accept all price fluctuations without understanding them? Undoubtedly, I've gained from these adjustments and re-adjustments in fares in the past as much as I've been disadvantaged by them. Right now, I'd like to better understand them.