FREE DOWNLOADS AND COMPETITION: Okay, the InstaWife's book was selling on Amazon for $100 used, which led her to make it available for free download on her website. The used price is now $95.24, after being available for download for over a month, even though there's a comment on the Amazon page telling people where they can get it for free. I'll grant that this isn't scientific, but it certainly suggests that the availability of free downloads doesn't destroy the market for a product, even at a very high price differential.
What's more, she's gotten quite a few donations through her website, making the entire operation a profitable one. People's willingness to make donations, sometimes sizable, in support of things they can get for free is something that has surprised me about blogging, and suggests that the portrayal of human behavior I got in Econ 101 was incomplete.