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Language, Internet and Platform Competition: the case of Search Engine

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  • Jeon, Doh-Shin
  • Jullien, Bruno
  • Klimenko, Mikhail M.

Abstract

The World Wide Web was originally a totally English-based medium due to its US origin. Although the presence of other languages has steadily risen, content in English is still dominant, which raises a natural question of how bilingualism of consumers of a home country affects production of web content in the home language and domestic welfare? In this paper, we address this question by studying how bilingualism affects competition between a foreign search engine and a domestic one within a small country and thereby production of home language content. We find that bilingualism unambiguously softens platform competition, which in turn can induce a reduction in home language content and in home country's welfare. In particular, it is possible that content in the foreign language crowds out so much content in the home language that consumers enjoy less content when they are bilingual than when they are monolingual.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9144.

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Date of creation: Sep 2012
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Handle: RePEc:cpr:ceprdp:9144

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Keywords: bilingualism; international trade; language; platform; search engine; two-sided market;

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  1. Simon P. Anderson & Stephen Coate, 2005. "Market Provision of Broadcasting: A Welfare Analysis," Review of Economic Studies, Oxford University Press, vol. 72(4), pages 947-972.
  2. Lendle, Andreas & Olarreaga, Marcelo & Schropp, Simon & Vezina, Pierre-Louis, 2012. "There goes gravity : how eBay reduces trade costs," Policy Research Working Paper Series 6253, The World Bank.
  3. Jeffrey Church & Ian King, 1993. "Bilingualism and Network Externalities," Canadian Journal of Economics, Canadian Economics Association, vol. 26(2), pages 337-45, May.
  4. repec:rje:randje:v:37:y:2006:3:p:720-737 is not listed on IDEAS
  5. Freund, Caroline L. & Weinhold, Diana, 2004. "The effect of the Internet on international trade," Journal of International Economics, Elsevier, vol. 62(1), pages 171-189, January.
  6. Caroline Freund & Diana Weinhold, 2002. "The Internet and International Trade in Services," American Economic Review, American Economic Association, vol. 92(2), pages 236-240, May.
  7. E. Glen Weyl, 2010. "A Price Theory of Multi-sided Platforms," American Economic Review, American Economic Association, vol. 100(4), pages 1642-72, September.
  8. Caillaud, Bernard & Jullien, Bruno, 2001. "Competing cybermediaries," European Economic Review, Elsevier, vol. 45(4-6), pages 797-808, May.
  9. Blum, Bernardo S. & Goldfarb, Avi, 2006. "Does the internet defy the law of gravity?," Journal of International Economics, Elsevier, vol. 70(2), pages 384-405, December.
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