Seller Experience and Transaction Prices on a Blockchain-Enabled Marketplace
43 Pages Posted: 8 Mar 2024 Last revised: 15 Jan 2025
Date Written: February 23, 2024
Abstract
Seller experience, defined as a seller’s tenure and past transaction volume, traditionally influences transaction prices by signaling quality to buyers or enabling more effective selling strategies. This study examines whether seller experience retains its impact in blockchain-enabled marketplaces, which reduce information asymmetry and transaction uncertainty through low-cost verification. Leveraging randomized product allocation in the generative art non-fungible tokens (NFTs) market, we find that seller experience does not attract additional demand, as experienced sellers fail to receive more offers or bidders. However, experienced sellers achieve higher transaction prices by employing more effective strategies, such as setting higher initial prices, holding tokens longer, and avoiding price adjustments. These findings highlight that blockchain technology reduces buyers' reliance on seller experience, but seller learning remains essential for maximizing transaction prices in blockchain-enabled markets. We discuss implications for blockchain-enabled marketplaces more broadly.
Keywords: Seller experience, pricing, selling strategies, blockchain technology, Non-Fungible Token (NFT), digital platform
JEL Classification: D40, L11, M30, M11
Suggested Citation: Suggested Citation