Do you think is preferable for oxford, and why

Reference no: EM133727454

Oxford University Press, an academic publishing company in England that publishes textbooks and academic monographs, is in contract negotiations with a new author (a professor at a U.S. university) to write the 1st edition of a new textbook in biochemistry. Two of Oxford's acquisitions editors are debating over how to structure the contract terms. One editor wants to offer the author an "advance"1 of X euros plus a royalty rate of 15% of net revenue.2 The second editor wants to offer the author no advance but a larger royalty rate of 20% of net revenue.

Discussion questions:

What are the plusses and minuses of both contracts, considering the author's incentives? If Oxford chooses the first contract, how should it choose the value of X? Assuming that X is correctly chosen, which of the 2 contracts do you think is preferable for Oxford, and why?

Reference no: EM133727454

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