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Soft selling occurs when a buyer is sceptical of the usefulness of a product and the seller offers to set a price that depends on realized value. For example, suppose you're 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, the adverse selection problem, and why soft selling is a successful signal.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91236122

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