A better software pricing model

Selling a piece of software is notoriously difficult. Entire documentaries are made off of the long battle between DRM creators, and DRM destroyers. It seems like no anti-piracy measure these days stands up for more than a weekend. It sucks. We can do better. We can make ethical software sales. I believe in us.

First, decide how much you want to make off a project. This is later gonna turn out to be a minimum, so pick it with that in mind. If you're more into traditional "maximizing profit" pricing, do as much field research as you'd like to find that maximum, and then pick that (or subtract some for safety). If you're good at guessing, it won't end up making much of a difference.

After you make your software, but before you release it, put up a website. Here's how it works. Every user would sign up, and pledge that they are willing to pay $X to buy the software. That money goes into escrow, but it won't give them the software. All it will do is send that info to your database.

Every time a user signs up, you check: If I sold this software for 1¢, how much money would I make? Since you have a big list of people, and how much they're willing to pay, this is easy. If that isn't enough, go up to 2¢. If that doesn't work, try 3¢. Eventually, you will either run out of people willing to pay that much, or you will find a price that gets you your target goal. If your target is met: release the software for that price.

Once the software is released, it switches to a conventional market. If the algorithm ended on $20, then users can buy it for $20. Additionally, all the users who were willing to pay $20 (or more) get charged $20, get the rest of their money back, and get given the software. Everyone who put up less than $20 gets their money back, with no software.

Improvements

The described algorithm is very slow, it can be much faster. For example, you could start at whatever the lowest offered price is, instead of 1¢. Then, go up to the second lowest offered price. Alternatively, the program could start at $1, then increase in $1 increments. Pick your poison.

Also, in the future, ideally, you wouldn't have to put up a dedicated website for any part of this. It would all just be integrated into the storefront.

Questions

How is this better?

Sellers no longer have to guess at how much people will want to pay, and buyers no longer have to deal with inaccurate guesses. Sellers also don't have to lose needed profit to piracy, or spend so much to combat it. This whole system is also more open, and more human, if you care about that sort of thing.

Why won't buyers lie?

Buyers won't lie because it's in their interest to tell the truth. Obviously, it's not in their interest to over-invest, and put up $50 when they would only pay $20. However, they also won't undershoot. If they were willing to pay $20, and only put up $5, they're delaying the release of the software by a significant amount. The informed user will not make this tradeoff, since they apparently value the software at $20. And, on the off chance it works, and they buy it for $5... well, you just sold the software, and got the minimum amount you wanted!

How does this fix piracy?

Well, there's two phases to this process: Unreleased, and Released. When the software is unreleased, it cannot possibly be pirated. It's not on the internet anywhere at all. But as soon as the software is released, it will already have made the expected amount. It is still possible to have that software pirated, but it won't push you below your minimum.