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Price determinants of non-fungible tokens in the digital art market

Author

Listed:
  • Horky, Florian
  • Rachel, Carolina
  • Fidrmuc, Jarko

Abstract

While the traditional art market stagnates, the digital art market is booming partially due to its connection with non-fungible tokens, which allow any unique goods to be mapped in a digital environment. Using unique individual data from the online art NFTs marketplace SuperRare, we combine econometric tools with recent machine learning approaches. This approach allows us to define explanatory variables out of the NFTs descriptions for our Hedonic pricing approach. Using these variables, we are able to show that our Hedonic pricing models exhibit relevant informational value for NFTs prices. Moreover, we show that NFTs cannot be viewed as a simple derivative of cryptocurrencies.

Suggested Citation

  • Horky, Florian & Rachel, Carolina & Fidrmuc, Jarko, 2022. "Price determinants of non-fungible tokens in the digital art market," Finance Research Letters, Elsevier, vol. 48(C).
    • Handle: RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322002495
    DOI: 10.1016/j.frl.2022.103007
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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