Language, Internet and Platform Competition
Résumé
The dominance of English language content on the Internet raises a question of
how consumer bilingualism in a given country a§ects the amount of home language
content and the countryís 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 beneÖt 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 Önd that bilingualism mostly increases consumer surplus but can
reduce domestic producer surplus. The welfare e§ect of taxing the foreign platform
is also analyzed.
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