EuroEconomica, Vol 21, No 2 (2008)

Abstract

Languages and cultures are mediums of transmitting information. Their value rests on their ability to lower variable costs in communication. Lower variable cost systems in general entail higher fixed costs. Each culture or language has evolved to adapt to the local environment. As environment changes, however, different cultural systems may fare differently under new conditions. An analytical economic theory is applied to study the co-evolution of languages, cultures and social systems. Many problems about the evolution and diffusion of cultures and languages and how they co-evolve with the social and economic systems can be understood in a very consistent way.