Language, Internet and Platform Competition

57 Pages Posted: 20 Aug 2020

See all articles by Doh-Shin Jeon

Doh-Shin Jeon

Toulouse School of Economics (TSE); Centre for Economic Policy Research (CEPR)

Bruno Jullien

University of Toulouse 1 - Toulouse School of Economics (TSE); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Mikhail M. Klimenko

Georgia Institute of Technology - School of Economics

Date Written: April 5, 2020

Abstract

The dominance of English language content on the Internet raises a question of how consumer bilingualism in a given country affects the amount of home language content and the country's welfare. We address this question by studying two-sided market competition between a foreign and a domestic content distribution platform in a small open economy. On the one hand, bilingualism has the benefit of increasing cross-side network externalities by increasing consumer concentration on the foreign platform, which increases the amount of home language content. On the other hand, bilingualism exposes home language content to competition from foreign language content and softens platform competition, which reduces the amount of home language content. We find that bilingualism mostly increases consumer surplus but can reduce domestic producer surplus. The welfare effect of taxing the foreign platform is also analyzed.

Keywords: Language, Bilingualism, Platforms, Two-sided Market, Content Producers, International Trade

JEL Classification: D43, F12, L13, L86

Suggested Citation

Jeon, Doh-Shin and Jullien, Bruno and Klimenko, Mikhail M., Language, Internet and Platform Competition (April 5, 2020). Available at SSRN: https://ssrn.com/abstract=3655055 or http://dx.doi.org/10.2139/ssrn.3655055

Doh-Shin Jeon

Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Bruno Jullien (Contact Author)

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Mikhail M. Klimenko

Georgia Institute of Technology - School of Economics ( email )

781 Marietta Street, NW
Atlanta, GA 30332
United States

HOME PAGE: http://www.econ.gatech.edu/docs/klimenko_vita0904.pdf

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