Payment system create the right incentives

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Reference no: EM131196622

The typical way that authors get paid for writing a book is via a royalty arrangement. For every book sold, the author gets a certain percentage, something like 15% of the list price on hardcover sales and 10% for paperback. The author might also get an advance against future royalties. This advance is usually paid in parts; one part upon signing of the contract, another upon delivery (and acceptance) of the manuscript, and the rest upon publication. How does this payment system create the right incentives, and where might it create a wedge between the interests of the publishing house and those of the author? Is there a better way to pay authors?

Reference no: EM131196622

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