How digital platforms shape innovation adoption?

Sreyaa Guha, Shameek Sinha and Rodrigo Belo

Nova SBE Working Paper Series from Universidade Nova de Lisboa, Nova School of Business and Economics

Abstract: Digital platforms increasingly mediate how consumers adopt new products, services, and technologies. Platforms shape adoption-relevant preference through two design levers: information design (through product pages, personalized recommendations, tutorials, and sponsored content), which affects users’ private evaluation and social visibility design (through reviews, ratings, rankings, badges, and algorithmic feeds) which affects users’ social evaluation. We ask when each lever is more effective in platform-mediated innovation adoption. We develop an analytical model that incorporates social factors such as homophily, and identity-based reference-group effects to identify the boundary conditions under which information design or social visibility design has the larger effect. The model shows that social visibility design can dominate information design when social evaluation carries more weight than private evaluation. It also shows that social visibility design is double-edged: it amplifies prevailing average preference, is strengthened by homophily, and can backfire when visible adopters are associated with dissociative reference groups. When social visibility design becomes sufficiently strong, the model predicts critical-mass effects and path dependence, so that platforms with similar information design intensity can produce different long-run adoption outcomes. Simulations complement the analytical propositions by mapping the parameter regions in which each equilibrium result emerges.

Keywords: Information design; Social visibility design; Homophily; Reference groups; Innovation adoption; Path dependence (search for similar items in EconPapers)
Pages: 38 pages
Date: 2026
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