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Neckties in the tropics: a model of international trade and cultural diversity

  • James E. Rauch
  • Vitor Trindade

Some cultural goods are consumed socially and are characterized by the same consumption network externalities as languages. Also, producers of new cultural goods in any one country draw on the stock of ideas generated by previous cultural production in all countries. For such goods, costless trade and communication tend to lead to the dominance of one cultural style, increasing utility in the short run but reducing quality and welfare in the long run. Increasing protection while keeping communication costs low may stimulate production of cultural goods that are `compatible' with the dominant style, adding little to the stock of usable ideas.

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Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 42 (2009)
Issue (Month): 3 (August)
Pages: 809-843

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Handle: RePEc:cje:issued:v:42:y:2009:i:3:p:809-843
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  1. Jordi Sintas & Ercilia Álvarez, 2002. "The Consumption of Cultural Products: An Analysis of the Spanish Social Space," Journal of Cultural Economics, Springer, vol. 26(2), pages 115-138, May.
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  4. Andreu Mas-Colell, 1999. "Should Cultural Goods Be Treated Differently?," Journal of Cultural Economics, Springer, vol. 23(1), pages 87-93, March.
  5. B. Curtis Eaton & Krishna Pendakur & Clyde Reed, 2000. "Socializing, Shared Experience and Popular Culture," Discussion Papers dp00-13, Department of Economics, Simon Fraser University, revised May 2000.
  6. Nina Pavcnik, 2002. "Trade Disputes in the Commercial Aircraft Industry," The World Economy, Wiley Blackwell, vol. 25(5), pages 733-751, 05.
  7. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  8. Eckhard Janeba, 2004. "International Trade and Cultural Identity," NBER Working Papers 10426, National Bureau of Economic Research, Inc.
  9. Church, Jeffrey & Gandal, Neil, 1992. "Network Effects, Software Provision, and Standardization," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 85-103, March.
  10. Bala, Venkatesh & Van Long, Ngo, 2005. "International trade and cultural diversity with preference selection," European Journal of Political Economy, Elsevier, vol. 21(1), pages 143-162, March.
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