Question
A) Soft selling occurs when a buyer is skeptical of the usefulness of a product and the seller offers to set a price that depends
A) Soft selling occurs when a buyer is skeptical of the usefulness of a product and the seller offers to set a price that depends on realized value. For example, suppose you are trying to sell a company a new accounting system that will reduce costs by 10%. Instead of naming a price, you offer to give them the product in exchange for 50% of their cost savings. Describe the information asymmetry from the perspective of both sides, the adverse selection problems from the perspective of both sides, and why and how soft selling can be a successful signal.
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