Market Forces in Play: Analyzing Pricing Dynamics of NBA NFT Collectibles

Minghong Zhuang ()
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Minghong Zhuang: Dongbei University of Finance and Economics

A chapter in Proceedings of the 2024 9th International Conference on Social Sciences and Economic Development (ICSSED 2024), 2024, pp 548-558 from Springer

Abstract: Abstract This manuscript delves into the influence of supply and demand on pricing mechanisms within nascent digital markets, with a particular focus on the sphere of digital collectibles associated with the National Basketball Association (NBA). Employing regression analysis on transaction data sourced from nbatopshot.com, the investigation meticulously explores pricing trends and discerns patterns pertinent to the NBA’s digital collectibles. The findings corroborate the fundamental economic tenets of demand, highlighting that escalating demand and the novelty of the market are pivotal in propelling NFT prices. In contrast, a high concentration of ownership detrimentally impacts NFT valuations, likely due to the enhanced risk of market manipulation and diminished asset liquidity. The principle of scarcity emerges as a crucial determinant, with NFTs of limited issuance or distinct attributes commanding premium prices, reflecting the market’s predilection for rarity. Furthermore, the analysis accentuates the significance of player-centric factors within the NBA NFT market, where performance metrics markedly influence pricing structures. Despite its distinctive characteristics, the NFT marketplace broadly adheres to classical economic theories. This research furnishes a comprehensive quantitative insight into the dynamics of the NFT market, offering valuable guidance for stakeholders to formulate nuanced trading and investment strategies.

Keywords: NFT market; pricing mechanism; digital collectibles (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-459-4_63

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DOI: 10.2991/978-94-6463-459-4_63

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