Digital new products in virtual worlds –How do limited-time offers influence consumers’ adoption Behavior?

Limiting availability is a common strategy to accelerate the adoption of new products. Yet, the status-related dynamics behind this process are unclear. We analyze the effects of digital limited-time offers on adoption behavior combining (1) a large-scale set of adoption and social network data from a virtual world and (2) data from a choice experiment to validate our results. We find that the number of peers who previously adopted the product accelerates the future adoption of regular products but slows down the adoption of limited-time offers. This reversal is driven by status-related dynamics: high-status users and consumers with a strong need for uniqueness adopt limited-time offers earlier. Our results suggest that scarcity signals can undermine peer effects and that exclusivity-seeking consumers may avoid overly popular products. These findings offer novel theoretical insights into social diffusion under scarcity and provide actionable implications for marketers.