Blockchain, DLT, and Fintech
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Paper Number
2156
Paper Type
short
Description
Since the beginning of 2021, non-fungible tokens (NFTs) have gathered considerable attention. The introduction of NFTs and the high prices that many have been auctioned off for raise the question how their introduction affects the prices of their physical counterparts. In this work, we use data from eBay to evaluate how the prices of basketball trading card collectibles are affected by the introduction of a related NFT market named "NBA Top Shot''. We find that the introduction of NFT collectibles causes the prices of physical collectibles to decline by about 5%. By applying natural language processing, we identify the player and the year that cards refer to and we find evidence suggesting the presence of a substitution effect. We study each agent's (buyers and sellers) reaction, calculate economic implications for marketplaces of physical collectibles, conduct various tests to validate our identification strategy, and discuss how we contribute to the literature.
Recommended Citation
Kanellopoulos, Ioannis Filippos; Gutt, Dominik; and Li, Ting, "Do Non-Fungible Tokens (NFTs) Affect Prices of Physical Products? Evidence from Trading Card Collectibles" (2021). ICIS 2021 Proceedings. 12.
https://aisel.aisnet.org/icis2021/fintech/fintech/12
Do Non-Fungible Tokens (NFTs) Affect Prices of Physical Products? Evidence from Trading Card Collectibles
Since the beginning of 2021, non-fungible tokens (NFTs) have gathered considerable attention. The introduction of NFTs and the high prices that many have been auctioned off for raise the question how their introduction affects the prices of their physical counterparts. In this work, we use data from eBay to evaluate how the prices of basketball trading card collectibles are affected by the introduction of a related NFT market named "NBA Top Shot''. We find that the introduction of NFT collectibles causes the prices of physical collectibles to decline by about 5%. By applying natural language processing, we identify the player and the year that cards refer to and we find evidence suggesting the presence of a substitution effect. We study each agent's (buyers and sellers) reaction, calculate economic implications for marketplaces of physical collectibles, conduct various tests to validate our identification strategy, and discuss how we contribute to the literature.
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