Capitalising the Network Externalities of New Land Supply in the Metaverse

Kanis Saengchote, Voraprapa Nakavachara and Yishuang Xu

Papers from arXiv.org

Abstract: When land becomes more connected, its value can change because of network externalities. This idea is intuitive and appealing to developers and policymakers, but documenting their importance is empirically challenging because it is difficult to isolate the determinants of land value in practice. We address this challenge with real estate in The Sandbox, a virtual economy built on blockchain, which provides a series of natural experiments that can be used to estimate the causal impact of land-based of network externalities. Our results show that when new land becomes available, the network value of existing land increases, but there is a trade-off as new land also competes with existing supply. Our work illustrates the benefits of using virtual worlds to conduct policy experiments.

Date: 2023-03
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://arxiv.org/pdf/2303.17180 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2303.17180

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().