Seller Experience and Transaction Prices on a Blockchain-Enabled Marketplace

34 Pages Posted: 8 Mar 2024

See all articles by Chaoran Liu

Chaoran Liu

London Business School

Xu Zhang

London Business School

Anja Lambrecht

London Business School

Date Written: February 23, 2024

Abstract

Seller experience drives demand and impacts transaction prices in a diverse set of markets ranging from the traditional art market to e-commerce platforms. We investigate whether seller experience still affects transaction prices in blockchain-enabled marketplaces that aim to reduce information asymmetry and transaction uncertainty. Our empirical focus is on generative art non-fungible tokens (NFTs). We find that, unlike on traditional e-commerce platforms, seller experience does not serve as a quality signal that attracts more demand in the NFT market. However, more experienced sellers still sell at higher transaction prices -- an outcome of more experienced sellers making more profitable selling decisions. They hold items for longer before listing, set higher initial prices, and are less likely to adjust list prices. Together, these insights suggest that blockchain technology is effective in reducing information asymmetry and transaction uncertainty, thereby creating a more equal environment for sellers regardless of their experience level, while at the same time, despite a more level playing field, experience still affects earnings on such marketplaces.

Keywords: Seller experience, pricing, selling strategies, blockchain technology, Non-Fungible Token (NFT), digital platform

JEL Classification: D40, L11, M30, M11

Suggested Citation

Liu, Chaoran and Zhang, Xu and Lambrecht, Anja, Seller Experience and Transaction Prices on a Blockchain-Enabled Marketplace (February 23, 2024). Available at SSRN: https://ssrn.com/abstract=4736884 or http://dx.doi.org/10.2139/ssrn.4736884

Chaoran Liu

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

Xu Zhang (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

HOME PAGE: http://xu-zhang.com/

Anja Lambrecht

London Business School ( email )

Regent's Park
London, NW1 4SA
United Kingdom

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