I work on an institutional repository and want to offer citation information for items in the repository as a bibtex file download.
Which character encoding should I use for writing the bibtex file?
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Regarding the encoding I would say you have only two options:
I would use UTF-8: It is more readable, and in a lot of cases it will work fine with bibtex.
I would also ensure biblatex/biber compability as biblatex/biber is more picky. While a lot of entries meant for biblatex works with bibtex too, the other way round is not true. Pay attention to the dates (month should be a number, and dates gives as YYY-MM-DD), and you shouldn't use parentheses in the entry keys.