Soft selting 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 a sales representative is trying to seil a company a new accounting system that wili, with certainty, reduce costs by 20ss. However. the customer has heard this claim before and believes there is only a 30% chance of actually realizing that cost reduction and a 70% chance of realizing no cost reduction. Assume the customer has an initial total cost of $200. According to the customer's beliefs, the expected value of the accounting system, or the expected reduction in cost, is Suppose the sales representative initially offers the accounting system to the customer for a price of 526.00 : The information asymmetry stems from the foct that the has less information about the efficacy of the accounting system than does the . At this price, purchase the accounting system, since the expected value of the accounting systern is than the price. Instead of naming a price, suppose the sales representatre wrura wo grv ure matomer the product in exchange for 50 of of the cost saing1. If there is no reduction in cost for the customer, then the customer does not have to pay. True or Faise: This pricing scheme alleviates some of the information asymmetry that is present in this scenario. True False Soft selling occurs when a buryer is skeptical of the usefulness of a product and the seler offers to set a price that depends on realized value. For example, suppose a sales representative is trying to sell a company a new accounting system that will, with certainty, reduce costs by 20%. However, the customer has heard this claim before and believes there is only a 30% chance of actually realizing that cost reduction and a 70% chance of realizing no cost reduction. Assume the customer has an initial total cost of $200. According to the customer's beliefs, the expected value of the sccounting system, of the expected reduction in cost, is Suppose the sales representative initially offers the accounting system to the custemer for a price of $26.00. The information asymmetry stems from the fact that the has less information about the efficacy of the accounting system than does the At this price, the customer purchase the accounting system, since the expected value of the accounting syil in the price. Instead of nar e sales representative offers to give the customer the product in eachange for 50% of the cost savings. if there is no reduction. If, then the customer does not have to pay. True or false: This prieing scheme alleviates some of the information asymmetry that is present in this scenario. True False 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 a sales representative is trying to sell a company a new accounting system that will, with certainty, reduce costs by 20 , However, the customer has heard this claim before and believes there is only a 30% chance of actually realizing that cost reduction and a 70 s. chance of realizing no cost reduction. Assume the customer has an initial total cost of $200. According to the customer's beliefs, the expected value of the accounting system, or the expected reduction in cost, is Suppose the sales representative initially offers the accounting system to the customer for a price of $26.00. The information asymmetry stems from the fact that the has less information about the efficacy of the accounting system than does the At this price, the customer purchase the accounting system, since the expected value of the accounting system is than the price. Instead of naming a price, suppose the sales representative offers to g omer the product in exchange for 50% of the cost savings. If there is no reduction in cost for the customer, then the customer does not hi True or False: This pricing scheme alleviates some of the information asymmetry that is present in this scenario. True False 5. Individual Problems 19-5 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 a sales representative is trying to sell a company a new accounting system that wil, with certainty, reduce costs by zoof. However. the customer has heard this ciaim before and believes there is only a 30% chance of actually realizing that cost reduction and a 70% chance of realiaing no cost reduction. Assume the customer has an initial total cost of $200. According to the customer's beliefs, the expected value of the accounting system, or the expected reduction in cost, is Suppose the sales representative initlally offers the accounting system to the customer for a grice of $26.00. The information asymmetry stems from the fact that the has less intormation about the efficacy of the accountind system than does the At this price, the customer purchase the accounting system, since the expected value of the accounting system is than the price. Instead of naming a Lse the sales representative offers to give the customer the product in exchange for 50% of the cost savings, If there is no reduction in cos stomer, then the customer does not have to pay. True or False: This pricing scheme alleviates some of the information ssymmetry that is gresent in this scenario. True False