Longitudinal diffusion effect on online shopping market with homophily of older adults

The advent of an aging society not only alters the demographic composition but also leads to the aging of owned assets, making the consumption potential of older adults increasingly significant in sustaining the economy. The utilization of technologies such as the internet is an area that should be actively pursued to stimulate consumption activities among older adults, and numerous studies have been conducted to promote technology adoption in this demographic. Social influence, one of the key factors in facilitating technology adoption, enhances mutual influence among consumers through social ties and stimulates online transactions. This study examines the impact of homophily formation among older adults on the diffusion of innovation and investigates the long-term effects that arise when these influences alter consumer decision-making and become internalized. By employing prospect theory, the study seeks to clarify these mechanisms. An analysis using an agent-based model focused on Japan’s online shopping market reveals that homophily formation in the early stages of market growth, which strengths social ties among older adults, can facilitate long-term market expansion. When launching a new online service, establishing mechanisms that connect older adults in advance could be a key strategy for enhancing the overall investment effectiveness of the service. It should be noted that this study focuses on an analysis of Social Influence, and future research should consider the impact of network effects that emerge within online platforms.