This only works if you assume perfect fungibility and thus price is the only differentiator. That obviously is not true outside of the most trivial apps, rather

This only works if you assume perfect fungibility and thus price is the only differentiator. That obviously is not true outside of the most trivial apps, rather there is a spectrum of price, features, UX, privacy and other considerations. A price discount might be helpful in terms of marketing to get people to take a look at your product in the first place vs a competitor, since even if it was far superior there's always some cost to switching. However, it's generally not sufficient to get everyone to stay either. The reason I'm paying money at all is because it's delivering value to me that is higher then the price I pay. If the original application is 50% more expensive but delivers 2-3x (or 10x+, a lot of apps are so cheap that if it costs me even a single digit number of extra hours per year in time it utterly drowns out the purchase price) the value, I'm not going to move to something inferior just because it's cheaper. Offering more tools to let devs convince people to give something a shot is an interesting move, but to actually beat out competitors and have customers stay still requires being, well, competitive right?