Tuesday, November 20, 2012
Posted by D. Daniel Sokol
Doh-Shin Jeon, Toulouse School of Economics, Bruno Jullien, University of Toulouse and Mikhail M. Klimenko, Georgia Institute of Technology analyze Language, Internet and Platform Competition: the case of Search Engine.
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.