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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. Mélitz, Jacques, 2002. "Language and Foreign Trade," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3590, C.E.P.R. Discussion Papers.
  2. Shlomo Weber & Victor Ginsburgh & Sheila Weyers, 2008. "Economics of Literary Translation. A Simple Theory and Evidence," Working Papers, Fondazione Eni Enrico Mattei 2008.12, Fondazione Eni Enrico Mattei.
  3. Ramon Caminal & Lluís M. Granero, 2008. "Multi-product Firms and Product Variety," UFAE and IAE Working Papers, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) 734.08, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  4. Peitz, Martin & Valletti, Tommaso M., 2008. "Content and advertising in the media: Pay-tv versus free-to-air," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 26(4), pages 949-965, July.
  5. 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.
  6. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
  7. Ortega, Javier & Tangeraas, Thomas, 2003. "Unilingual versus Bilingual Education System: A Political Economy Analysis," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4003, C.E.P.R. Discussion Papers.
  8. Yongmin Chen & Michael H. Riordan, 2007. "Price and Variety in the Spokes Model," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 117(522), pages 897-921, 07.
  9. Ginsburgh, Victor & Ortuño-Ortín, Ignacio & Weber, Shlomo, 2005. "Disenfranchisement in Linguistically Diverse Societies: The Case of the European Union," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4875, C.E.P.R. Discussion Papers.
  10. Jeffrey Church & Ian King, 1993. "Bilingualism and Network Externalities," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 26(2), pages 337-45, May.
  11. Melitz, Jacques, 2007. "The impact of English dominance on literature and welfare," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 64(2), pages 193-215, October.
  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. Ramon Caminal, 2013. "The Economic Value of Reciprocal Bilingualism," Working Papers 713, Barcelona Graduate School of Economics.
  2. Ramon Caminal, 2013. "The economic value of reciprocal bilingualism," UFAE and IAE Working Papers, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) 933.13, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  3. Emilie Dargaud & Carlo Reggiani, 2012. "On the Price Effects of Horizontal Mergers: A Theoretical Interpretation," The School of Economics Discussion Paper Series, Economics, The University of Manchester 1201, Economics, The University of Manchester.

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