An audience member recently asked the reason for buying a digital asset; and, if so, why would anyone pay a premium for that asset on resale. The answer to this query is the same as the response to the topic of how to comprehend estate planning for artists and collectors: the economic decision-making process when purchasing any collection is inevitably irrational. When you are about to buy a comic NFT from companies like BattleSpecies, you might like a bit of knowledge behind the whole psychology and Tokenomics.
Most typically, when the collector is experiencing the emotional “high” of seeking and collecting the object, such unreasonable economic judgments are made. This irrationality extends beyond just possessing physical or digital collectibles. It also pertains to the possession of inherited property and family companies.
First off, buying a collectible involves making a special kind of economic decision since the collector places a high value on ownership, choices are frequently illogical from an economic standpoint, and customers are largely motivated by relationships rather than money.
Second, once you hold the asset, you start to perceive its value as being higher. People who buy concert tickets depending on the lottery value of such tickets are one example of this. If you are asked to resale them, do so for a lot more money.
The process of placing a bid at an auction is a prime illustration of this. When you place a bid on an item, you start to claim it as “yours.” Even though you don’t have any rights to the item at the time of the bid, you raise your price if that ownership is contested to keep from “losing” your possession. The astronomical prices occasionally witnessed at auction are caused by this “virtual ownership”. The sensation of loss makes giving up on rising bids increasingly difficult.
People frequently make irrational financial decisions, particularly when faced with the possibility of losing tangible items like collectibles and works of art. The economic irrationality of these choices depends on the circumstances and roles that people encounter, which may lead them to adjust their behavior in accordance.