5. Individual Problems 19-5 Soft selling occurs when a huyeris skeptical of the usefulness of a product and the seller offers to set a price that depends on realized value. For example. suppose a sales reprEenIative is trying to sell a company a new accounting system that will, with certainty. reduce costs by 10%. However. the customer has heard this claim before and believes there is only a 19% chance of actually realizing that cost reduction and a 90% chance of realizing no cost reduction. Assume the customer has an initial total cost of $300. According to the customer's beliefs, the expected value ofthe accounting system, or the expected reduction in cost, is . Suppose the sales reprenlaliue initially oFfers the accounting system to the customer for a price of$15.5[|. The inFom'Iation asymmetry stems from the fact that the V has less information about the elcacy of the accounting system than ClIZE the V . At this price, the customer 7 purchase the accounting system, since the expected value of the accounting system is 7 than the price. Instead of naming a price, suppose the sales reprenlative offers to give the customer the product in exchange For 50% of the cost savings. IF there is no reduction in cost for the customer, then the customer ClIZE not have to pay. True or False: This pricing scheme worsens the problem of information asymmetry in this scenario. 0 True 0 False