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Markets and linguistic diversity

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  • Ramon Caminal

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Abstract

The choice of language is a crucial decision for firms competing in cultural goods and media markets with a bilingual or multilingual consumer base. To the extent that multilingual consumers have preferences over the intrinsic characteristics (content) as well as over the language of the product, we can examine the efficiency of market outcomes regarding linguistic diversity. In this paper, I extend the spokes model and introduce language as an additional dimension of product differentiation. I show that: (i) if firms supply their product in a single language (the adoption model) then the degree of linguistic diversity is inefficiently low, and (ii) if some firms supply more than one linguistic version (the translation model) then in principle the market outcome may exhibit insufficient or excessive linguistic diversity. However, excessive diversity is associated to markets where the fraction of products in the minority language is disproportionately high with respect to the relative size of the linguistic minority.

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Bibliographic Info

Paper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 781.09.

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Length: 35
Date of creation: 01 Sep 2009
Date of revision:
Handle: RePEc:aub:autbar:781.09

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Keywords: Product variety; language; translation;

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References

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  1. Ortega, Javier & Tangeraas, Thomas, 2003. "Unilingual versus Bilingual Education System: A Political Economy Analysis," CEPR Discussion Papers 4003, C.E.P.R. Discussion Papers.
  2. Ramon Caminal & Lluís M. Granero, 2012. "Multi‐product Firms and Product Variety," Economica, London School of Economics and Political Science, vol. 79(314), pages 303-328, 04.
  3. Ginsburgh, Victor & Ortuño-Ortín, Ignacio & Weber, Shlomo, 2005. "Disenfranchisement in Linguistically Diverse Societies: The Case of the European Union," CEPR Discussion Papers 4875, C.E.P.R. Discussion Papers.
  4. Peitz, Martin & Valletti, Tommaso, 2004. "Content and Advertising in the Media: Pay-TV versus Free-To-Air," CEPR Discussion Papers 4771, C.E.P.R. Discussion Papers.
  5. Jacques Melitz, 2003. "Language and Foreign Trade," Working Papers 2003-26, Centre de Recherche en Economie et Statistique.
  6. Melitz, Jacques, 2007. "The impact of English dominance on literature and welfare," Journal of Economic Behavior & Organization, Elsevier, vol. 64(2), pages 193-215, October.
  7. Michael H. Riordan & Yongmin Chen, 2005. "Price and Variety in the Spokes Model," Discussion Papers 0405-20, Columbia University, Department of Economics.
  8. Jeffrey Church & Ian King, 1993. "Bilingualism and Network Externalities," Canadian Journal of Economics, Canadian Economics Association, vol. 26(2), pages 337-45, May.
  9. N. Gregory Mankiw & Michael D. Whinston, 1986. "Free Entry and Social Inefficiency," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 48-58, Spring.
  10. Shlomo Weber & Victor Ginsburgh & Sheila Weyers, 2008. "Economics of Literary Translation. A Simple Theory and Evidence," Working Papers 2008.12, Fondazione Eni Enrico Mattei.
  11. Edward P. Lazear, 1995. "Culture and Language," NBER Working Papers 5249, National Bureau of Economic Research, Inc.
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Cited by:
  1. Emilie Dargaud & Carlo Reggiani, 2012. "On the Price Effects of Horizontal Mergers: A Theoretical Interpretation," The School of Economics Discussion Paper Series 1201, Economics, The University of Manchester.
  2. Carlo Reggiani, 2012. "Spatial price discrimination in the spokes model," The School of Economics Discussion Paper Series 1207, Economics, The University of Manchester.
  3. Ramon Caminal, 2013. "The economic value of reciprocal bilingualism," UFAE and IAE Working Papers 933.13, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  4. Ramon Caminal, 2013. "The Economic Value of Reciprocal Bilingualism," Working Papers 713, Barcelona Graduate School of Economics.

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