“In 2001, Oren Etzioni was on a plane chatting up his seat mates when he realized they had all paid less for their tickets than he did. ‘I thought, ‘don’t get mad, get even,” he says. So he came home to his computer lab at the University of Washington, got his hands on some fare data, and plugged it into a few basic prediction algorithms. He wanted to see if they could reliably foresee changes in ticket prices. It worked: Not only did the algorithms accurately anticipate when fares would go up or down, they gave reasonable estimates of what the new prices would be.
“Etzioni’s prediction model has grown far more complex since then, and the company he founded in 2003, Farecast, now tracks information on 175 billion fares originating at 79 US airports. The database knows when airline prices are going to change and has uncovered a host of other secrets about air travel.”