Originally Posted by
sosfo
I checked in for a friend and saw the offer at $259...At the kiosk in the morning the offer was still there but was $315 instead. Odd that is would go UP.
Why is this odd? This is basic conditioning of the customer. Your experience was "I waited and the price went up." Next time, you see the offer and think "Last time I waited and the price went up, so I need to buy it NOW." And then AA has the sale in the bag, rather than risking a chance that they give away the seat as an upgrade in the interim or don't sell it at the kiosk.
Consider the converse - if people think prices will go down close to departure, then everyone will sit on purchasing decisions until the last minute and the airline has no ability to predict who will be flying. The objective, then, is to scare the customer into locking in their seat, which also means less uncertainty for the airline to consider in its operations. This is part of why there are rarely good last-minute deals on airfare.