 The economics of resale royalties: Evidence from non-fungible tokensYutong Sun, Shangrong Jiang and Shouyang Wang International Review of Financial Analysis, 2025, vol. 106, issue C Abstract: By constructing a comprehensive dataset of non-fungible tokens (NFTs) transactions, we investigate the impacts of resale royalties on the trading characteristics of market participants in the NFT platform. Our results show that one standard deviation increase in the royalty rate significantly correlates with a 7.04% decrease in market prices and a 4.8% decrease in the resale probability of NFTs. We also find that royalties have a greater impact on tokens with higher rarity during the NFT market boom. We deepen our analysis by incorporating several channels of the NFT royalty effects. Our analysis reveals that NFTs-enforced royalties have worse investment performance compared to royalty-free tokens. NFT investors attach less price premium to NFTs with royalties, since the information for the market value of NFTs is more symmetric when incurring royalty payments. Additionally, royalty tokens are less likely to be traded by speculative investors on the NFT platform. Our findings are robust across different estimation methods and transaction samples. Keywords: Non-fungible tokens; Resale royalties; Blockchain; Investment performance; Value signaling; Wash trading (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:106:y:2025:i:c:s1057521925005599 DOI: 10.1016/j.irfa.2025.104472 Access Statistics for this article International Review of Financial Analysis is currently edited by B.M. Lucey More articles in International Review of Financial Analysis from Elsevier |
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