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Markets and linguistic diversity

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  • Ramon Caminal

Abstract

The choice of language is a crucial decision for …rms 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 …rms supply their product in a single language (the adoption model) then the degree of linguistic diversity is inefficiently low, and (ii) if some …rms 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 Barcelona Graduate School of Economics in its series Working Papers with number 396.

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Date of creation: Jul 2009
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Handle: RePEc:bge:wpaper:396

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Keywords: Product variety; language; translation;

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References

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  1. 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.
  2. Peitz, Martin & Valletti, Tommaso M., 2008. "Content and advertising in the media: Pay-tv versus free-to-air," International Journal of Industrial Organization, Elsevier, vol. 26(4), pages 949-965, July.
  3. 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.
  4. Yongmin Chen & Michael H. Riordan, 2007. "Price and Variety in the Spokes Model," Economic Journal, Royal Economic Society, vol. 117(522), pages 897-921, 07.
  5. 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.
  6. Ginsburgh, Victor & Weber, Shlomo & Weyers, Sheila, 2007. "Economics of Literary Translation: A Simple Theory and Evidence," CEPR Discussion Papers 6432, C.E.P.R. Discussion Papers.
  7. 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.
  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. Ortega, Javier & Tangerås, Thomas P., 2004. "Unilingual Versus Bilingual Education System: A Political Economy Analysis," IZA Discussion Papers 1433, Institute for the Study of Labor (IZA).
  10. Mélitz, Jacques, 2002. "Language and Foreign Trade," CEPR Discussion Papers 3590, C.E.P.R. Discussion Papers.
  11. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
  12. Edward P. Lazear, 1995. "Culture and Language," NBER Working Papers 5249, National Bureau of Economic Research, Inc.
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Cited by:
  1. Carlo Reggiani, . "Optimal Differentiation and Spatial Competition: The Spokes Model with Product Delivery," Discussion Papers 09/13, Department of Economics, University of York.
  2. 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).
  3. Ramon Caminal, 2013. "The Economic Value of Reciprocal Bilingualism," Working Papers 713, Barcelona Graduate School of Economics.
  4. Emilie Dargaud & Carlo Reggiani, 2012. "On the Price Effects of Horizontal Mergers : A Theoretical Interpretation," Working Papers 1222, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.

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