Fukuda Reo

Non-fungible tokens (NFTs) present luxury brands with a pricing dilemma: high prices sustain quality inferences but invite visible failure on transparent blockchain markets, whereas low prices stimulate demand but anchor perceptions downward. This research investigates zero pricing (free distribution) as a strategy to navigate this dilemma. Analysis of 65 NFT collections from 32 brands on OpenSea and 22,841 posts on X is followed by six experiments (N = 1,924). Low-priced NFTs inflict the most severe loss of brand luxuriousness, yet free NFTs attenuate this loss to levels indistinguishable from comparable pricing (Study 1). This attenuation does not extend to physical products, implicating congruence between inferred cost structure and zero pricing as a governing condition (Study 2). When secondary-market demand declines, free NFTs weaken failure inferences that otherwise erode perceived luxury; however, this buffer dissipates when the NFT features flagship brand elements (Studies 3a-3c). When demand increases, free and paid NFTs yield equivalent recovery (Study 4). Free distribution thus caps downside risk without forfeiting upside potential. These findings advance the zero-price literature by establishing inferred cost structure as a boundary condition for the anchor-shift mechanism and equip brand managers with a pricing approach calibrated to the transparency of blockchain-based markets.

Abstract This study explores how the scarcity of virtual products in virtual gaming spaces influences brand evaluation in the real world. While previous studies suggest that scarcity in virtual spaces can enhance brand value, the mechanisms and conditions under which this effect occurs (e.g., the characteristics of virtual spaces, consumer traits, and stimulus). Drawing on insights from scarcity research on physical products, we propose that the effects of scarcity may stem from the expectation of impression management. We developed a model that incorporates insights from physical product scarcity research with the unique aspects of virtual spaces and consumer characteristics. Through four studies, we discovered that the effect of supply scarcity in enhancing brand evaluation is pronounced when the space is online and when consumers have a high level of social presence. Furthermore, in cases where social presence is not high, encounters with others wearing scarce products were found to enhance the scarcity effect. Companies can enhance brand evaluation by strategically using virtual product scarcity in online gaming, particularly when targeting consumers with high social presence or creating opportunities for players to interact with others wearing scarce items.