“Soft Selling” and Adverse Selection
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.