Pay for your own dog food

Good idea. The pricing structure is part of the product. I did the halfway version of this in a previous project: there was a special magic credit card number which didn't actually get charged, but I got the emails every month telling me what had been fake-charged so I felt that part of the customer experience. Recommended.

People have wildly different notions about what they consider a reasonable price for something. Before I started making social apps, I was selling import books. I had people often paying $50 or more for something that in Japan might have cost $5. Definitely would have missed that if I had just tried to imagine what I would be willing to pay myself, only way I discovered the "real price" was by auctioning items first.

It's also a good sanity check on your payments process -- if you don't get charged, or you get charged too much, you'll know about it a lot sooner than if you waited for customer complaints to roll in.

Idea works well for subscription type payments. I don't know if it works that well for one-time software sales, though.

I'm making a mac application. Most likely I will be charging $50 for this application. It looks like my current design budget is about $1,500. I feel that if I find the product worth $1,500 someone might be willing to pay $50.

Doesn't seem like that would work if, say, I'm a startup trying to sell high-volume VoIP service to large enterprises.

It may be better to "pay" for your application by taking that money out of the organization by donating, "losing", or burning it.

Only when the money actually disappears will you be able to have a good feeling for how the price affects decision making.

edit: I think it would be better to burn the money than donate it to eliminate the positive reinforcement donating would provide.

This is essentially how I set the pricing for Tarsnap -- I started out by asking myself "how much would I like to pay to store my backups?"

This sounds a bit like the old trick of setting your alarm clock 15 minutes fast to trick yourself into getting up earlier. It works at first, but eventually you get used to just making the adjustment in your head and hitting snooze a couple more times

Not doing this is one of the biggest problems with Microsoft's internal dogfooding efforts, in my opinion. They dogfood just about every feature of every product MS offers, but the one thing they never, ever dogfood is licensing and pricing. Everyone just installs "Windows X Ultimate" or "Windows Server X Enterprise Edition" or "Visual Studio X Team System" or "SQL Server X Enterprise" as many times on as many machines supporting as many users as they feel like, rather than being pressured by budgetary constraints to pick the product that meets their needs best at a price they can afford.

The result is that most of the MS rank and file remain blithely ignorant of the extremely high retail prices of these products and their convoluted (sometimes almost punitive) licensing schemes. Given that licensing and pricing is a critical aspect of software use and can easily make the difference between user satisfaction and user desertion to a competitor's product, I've always felt this oversight hurt Microsoft far more than they imagine.