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6 . Individual Problems 195 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 10%. However, the customer has heard this claim before and believes there is only a 40% chance of actually realizing that cost reduction and a 60% chance of realizing no cost reduction. Assume the customer has an initial total cost of $100. 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 $7.00. The information asymmetry stems from the fact that the V has less information about the efficacy of the accounting system than does the V . At this price, the customer V purchase the accounting system, since the expected value of the accounting system is v than the price. Instead of naming a price, suppose the sales representative offers to give the customer 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 have to pay. True or False: This pricing scheme worsens the problem of information asymmetry in this scenario. 0 True 0 False ' "I c: c: Continue without saving