"The converse of that is also the effect of buyers learning that watching items instead of buying them means they might get a cheaper price."

This situation would have a positive side. It would indicate that a buyer stopped long enough and was interested enough

in the item to actually place your item on their watch list. Competitors aside I like the idea of sending an offer to an 'interested' buyer.
Getting a direct offer from a seller would be a consequence of 'watching' so our watchers could become a pool of 'interested' buyers
while other would for fear of being spammed.