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Markets and linguistic diversity

  • Ramon Caminal

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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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
Date of revision:
Handle: RePEc:bge:wpaper:396
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  1. 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.
  2. Ortega, Javier & Tangeraas, Thomas, 2003. "Unilingual versus Bilingual Education System: A Political Economy Analysis," CEPR Discussion Papers 4003, C.E.P.R. Discussion Papers.
  3. Shlomo Weber & Victor Ginsburgh & Sheila Weyers, 2008. "Economics of Literary Translation. A Simple Theory and Evidence," Working Papers 2008.12, Fondazione Eni Enrico Mattei.
  4. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
  5. Ramon Caminal & Lluís M. Granero, 2008. "Multi-product firms and product variety," Working Papers 338, Barcelona Graduate School of Economics.
  6. 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.
  7. Edward P. Lazear, 1999. "Culture and Language," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S95-S126, December.
  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. 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.
  10. repec:clu:wpaper:0405-20 is not listed on IDEAS
  11. 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.
  12. 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.
  13. Jacques Melitz, 2003. "Language and Foreign Trade," Working Papers 2003-26, Centre de Recherche en Economie et Statistique.
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