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Group Membership and Diffusion in Virtual Worlds

Virtual goods continue to emerge in online communities, offering scholars an opportunity to understand how social networks can facilitate the diffusion of innovations. We examine the social ties for over one million user-to-user virtual goods transfers in Second Life, a popular 3D virtual world, and the unique role that groups play in the diffusion of virtual goods. The results show that individuals -- especially early adopters -- are more likely to adopt a virtual good when they belong to the same groups as previous adopters. We also find that groups exhibit bursty adoption, in which many individuals adopt in short succession. In addition, we show that adoption activity within a group depends on the group's size and interactivity. Our work provides insights into theories of social influence and homophily.