Post-scarcity economics leads to some fun debates about pricing. I've found that many people want to pay for good software but not many people can agree on what a fair price is. Most indie houses I've visited tell me they struggle mightily on deciding what the "right" price point is. Ultimately their answer boils down to "whatever the market is willing to pay." They just sort of take the pulse of the market and set a price that seems consistent and fair with respect to similar titles.
But that seems wrong to me because it's arbitrary and subjective. If I ask five different Slashdotters whether an Android app is priced reasonably or not, I may get five different answers. Some will think it's too expensive, others will think the app is worth more. The users who think the app is too expensive will pirate it. The users who think it's worth more will only pay as much as the author charges, since they're not furnished with an easy way to give more to the author. This all leads me to believe that we go about pricing software entirely wrong.
If the right price is whatever the market is willing to pay, then why not let the market decide the price itself? Users should be able to decide how much they're going to pay you when they buy your software. If they pick a number below your recommended price (which should be the default), then show them some ads or something. That way at least you're getting the ad revenue instead of piratebay.
But it cuts both ways too. If you let users pick their own price, generous users will have an easy way to give you more money for your work. Some outliers that really like your work may even donate large amounts.
By using this pay-what-you-want model during the app purchasing experience rather than a donations button off to the side, you create an integrated experience which benefits from convenience psychology. The more convenient it is for people to pay you more, the more you will get paid because you've made it easy for your users to be generous.
And by making "free" an option in exchange for some ad impressions, you've completely abolished piracy. Why visit a shady torrent site that has shady ads when you can get it straight from the author and see their less obnoxious ads?
Whenever I meet with and indie developer, I always strongly encourage this model. The biggest reason: the market already functions this way. When you price your app, the user always has piracy as an alternative. If they don't like your price, they'll simply pirate your app. Let the user make the arbitrary decision of what price is right. Don't pretend you can make it for them. You can't.