Flexifare i.e. the first option has been implemented by IRlys as pilot project on experimental basis. Early birds get benefitted and late comers are penalized. This kind of pricing suits to a market condition where normal occupancy is much lower than 100% i.e. the customer is not guaranteed and arrangements/resources have to be tied up in advance. Airline operator can provide seats at much lesser cost if a fraction of all the seats can be sold in a few months in advance (these seats are non-cancellable). This assured revenue helps in bringing down the cost per seat through enhanced occupancy and resources like aircraft lease etc are tied up accordingly.
Option 3 is curious and can be applied...
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in the scenario if an operator run a solitary train-set on a route having 1000 seats and there is a demand of only 600 passengers (by past experience/data). This kind of train operation is done in the dedicated tourist trains like “Palace on Wheels” and many others. In order to recover the haulage charges, employee cost, and other costs which are predominantly fixed, the operator may like to recover the cost from first about 550 to 650 passengers and ( earn a guaranted reasonable profit if cost is recovered from 550 passengers only) . In order to enhance profitability , the operator may start reducing the fare in slabs once the normal fare tickets had been sold and break even is achieved or almost achieved, so as to entice more passengers to do journey i.e. by creating a new market.
I.Rlys don’t have to bother about filling of seats or tying up the resources like air operators have to. Monopoly in rail movement, huge demand for rail transport and inherent advantages of rail transport has bestowed it freedom to fix prices at its whims and fancies without bothering about market to a large extent. Fares are based on the policy rather than actual market conditions. It makes a policy that last minute travelers i.e. planning journey only 1-2 days in advance be charged more and started tatkal. Then it went on increasing the tatkal quota to increase revenue. Then it introduced premium tatkal charging about 4-5 times of normal fare. People have to pay through nose. Now coming up with flexi pricing with a huge rise of 50%. These tactics indicate intention of extorting maximum revenue from the hapless travellers who does not have a good alternative (bus uncomfortable, airline very costly and limited coverage).
Since late comers are already treated with tatkal/Premium tatkal fares, there should be no further flexi pricing for the late comers. Instead practice of charging normal fares should be continued.