Task: Soft Selling Adverse selection question:
Soft selling occurs when a buyer is skeptical of the quality or usefulness of a product or service. For example, suppose you're trying to sell a company a new accounting system that will reduce costs by 10%. Instead of asking for 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.
Chapter of Book: Managerial Economics: A Problem Solving Approach
Authors: Luke M. Froeb and Brian T. McCann