“Offering discounts during slow periods” is exactly the same thing as “increasing prices during busy periods”, just packaged in a way that makes it look better.
Depends on what you consider a baseline price.
If a typical fast food sandwich is $4, and your sandwich is nominally $4, but during peak hours you charge $5, that’s jacking up the price. If instead during slow times, you drop the price to $3.50, then that’s giving a discount.
Of course, the counter is if you can afford to sell the sandwich at $3.50, then why is it nominally $4? Is it really a $4 sandwich?
Dynamic pricing is problematic for just that reason. Sell at $4, sell at $3.50, but don’t tell me a $3.50 sandwich is a $4 sandwich sometimes.
Then why do all stores offer sales? They either lose money on the items or take much less in profit. The logic is that sales will draw so many more customers that the difference in revenue will be made up.
So why don’t stores just lower their prices all the time? Because there’s a limit at which profit can be made. And because customers are psychologically attracted to sales and have been conditioned to look out for them. When a new CEO took over a while back, Penneys abandoned their policy of frequent sales for always low prices. The chain crashed and has never recovered.
In any case, surge pricing and discounts/sales are two different things in concept and execution. They shouldn’t be confused for one another.
The number-crunchers who know more about economics than I ever care to try to figure it all out.
If dropping prices during typical slow times creates a big enough increase in purchases, there’s a point where the sale price becomes profitable.
Of course if they drop the price and there is no increase in purchases. Then the stop that particular promotion.