The market purist might argue for a second-price auction for boarding order, where people board in the order of highest sealed bid for boarding order to lowest, but pay the amount bid by the person behind them in the sequence; or for "Paris Metro Pricing" where everyone being in the "priority" line results in a large fraction of them opting not to pay the premium for the next flight they take. Or they might think up something I haven't thought of.

CGP Grey on "The better boarding method airlines won't use" - https://www.youtube.com/watch?v=oAHbLRjF0vo

Thanks for the link! This is a good example of the use of the medium of video (animation) to present information more clearly than alternative media could.

He's concerned not about allocating the suffering optimally (to the people least willing to pay to reduce it, for example because they are in excellent health or couldn't afford the flight otherwise) but about reducing the total amount of suffering, which is far more important.

In other contexts, the main benefit of market mechanisms is precisely that they vastly reduce suffering, for example by stimulating the production of socially valuable goods. Is there a way market mechanisms for boarding order could have such a benefit? For example, by rewarding people who board in an order that minimizes overall boarding delay? I'm skeptical.

For market purism to work people need to have an idea what they are paying for. If this is changing too quickly or there is personalized pricing it becomes a very different kind of game.

Market purism very rarely works, just like any kind of purism, but it's still an interesting thought experiment.

People don't make buying decisions from a purely rational headspace, though. Charge too much for the upfront ticket and people will go to someone advertising it for lower (but with additional back-end services that are must-have)

My guess is the hidden fees end up making businesses more money

especially the australian airline example and perhaps with much broader applicability, I know that companies are completely happy with managable competition (Australian domestic airlines are functionally 2 players, and similarly across many large industries here that's true) where over time once they can establish profitable gimmicks neither party really wants to rock the boat and they're able to lock in that margin forever more. It doesn't suit established players to compete on that, they both open up losing situations in the game theory compared to silent non-competition.

In high capital businesses like airlines and supermarkets it seems to play out all over the place these days.

They do that too.