Embedding Economic Incentives in Social Networks Shape the Diffusion of Digital Technological Innovation

TL;DR

This paper investigates how economic incentives embedded in social networks influence the diffusion of digital technological innovations like NFTs, revealing key mechanisms and motivations behind retweeting behaviors.

Contribution

It systematically analyzes NFT-related Twitter data to uncover how economic incentives shape diffusion dynamics and introduces an embedded economic incentives perspective into innovation diffusion theory.

Findings

Retweeting is driven by Freemint and trading information.

Higher economic incentives increase retweeting activity.

NFT diffusion follows a 'Ringed-layered' information mechanism.

Abstract

The digital innovation accompanied by explicit economic incentives have fundamentally changed the process of innovation diffusion. As a representative of digital innovation, NFTs provide a decentralized and secure way to authenticate and trade digital assets, offering the potential for new revenue streams in the digital space. However, current researches about NFTs mainly focus on their transaction networks and community culture, leaving the interplay among diffusion dynamics, economic dynamics, and social constraints on Twitter. By collecting and analyzing NFTs-related tweet dataset, the motivations of retweeters, the information mechanisms behind emojis, and the networked-based diffusion dynamics is systematically investigated. Results indicate that Retweeting is fueled by Freemint and trading information, with the higher economic incentives as a major motivation and some potential organizational tendencies. The diffusion of NFT is primarily driven by a 'Ringed-layered' information mechanism involving individual promoters and speculators. Both the frequency and presentation of content contribute positively to the growth of the retweet network. This study contributes to the innovation diffusion theory with economic incentives embedded.