According to Cointelegraph, a series of studies published in November by researchers from Western University in Canada, Tilburg University in the Netherlands, the University of North Carolina at Chapel Hill in the U.S., and Rennes School of Business in France, have shed light on the social and psychological factors that drive the non-fungible token (NFT) market. The studies found that personal experiences, luck, asset scarcity, and consumer optimism were the main catalysts for market movement in the NFT space.
In a study analyzing the market dynamics of Crypto Punks, a popular series of NFT assets, researchers Guneet Kaur Nagpal and Luc Renneboog found that buyers already invested in Ethereum were more likely to engage in the market at higher costs and saw higher gains. They also noted that Ethereum gains and losses did not necessarily affect NFT prices but influenced the decision to sell or resell assets. The creation of rarity, for both Crypto Punks types and accessory combinations, was found to determine pricing.
In another study, Chuyi Sun of the University of North Carolina at Chapel Hill examined transaction-level data from about one million wallets to study how personal experiences contributed to bubbles in the NFT market. Sun found that NFT investors who randomly received more valuable NFTs in the primary market were more likely to participate in subsequent primary market sales and purchase more lottery-like cryptocurrencies.
A third study by Akanksha Jalan and Roman Matkovskyy of Rennes School of Business explored the impact of experience, overconfidence, and optimism on future cryptocurrency and NFT ownership. They found that negative past experiences and investor optimism both positively affected the odds of future cryptocurrency and NFT ownership. The researchers suggested that individual crypto investors with negative experiences might attribute their losses to factors beyond their control, such as market volatility, rather than poor decision-making on their part.
