Unveiling the paradox of NFT digital scarcity: Impacts of digital scarcity on online trading and social behaviors

Abstract

Embracing the scarcity principle, we explore the effect of digital scarcity in nonfungible tokens (NFTs) on users’ online trading behaviors and social interactions (e.g., considering them as gifts). Using a dataset obtained from the NFTGo platform, we find that digital scarcity facilitates social behaviors but hinders trading behaviors. Notably, the influences of digital scarcity are more pronounced when there is less uncertainty (e.g., higher consistency of rarity evaluation and stronger impact of influencers). This research not only enriches the NFT literature with fresh insights into social and trading behaviors, but also extends the scarcity principle to the digital realm.