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The pricing of digital art

Author

Listed:
  • Chen, Yi-Hsuan
  • Kräussl, Roman
  • Verwijmeren, Patrick

Abstract

The intersection of recent advancements in generative artificial intelligence and blockchain technology has propelled digital art into the spotlight. Digital art pricing recognizes that owners derive utility beyond the artwork's inherent value. We incorporate the consumption utility associated with digital art and model the stochastic discount factor and risk premiums. Furthermore, we conduct a calibration analysis to analyze the effects of shifts in the real and digital economy. Higher returns are required in a digital market upswing due to increased exposure to systematic risk and digital art prices are especially responsive to fluctuations in business cycles within digital markets.

Suggested Citation

  • Chen, Yi-Hsuan & Kräussl, Roman & Verwijmeren, Patrick, 2023. "The pricing of digital art," CFS Working Paper Series 716, Center for Financial Studies (CFS).
    • Handle: RePEc:zbw:cfswop:281200
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Digital art; conspicuous consumption; utility dividends; risk premium; valuation;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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