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Digital real estate in the metaverse: An empirical analysis of retail investor motivations

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  • Ante, Lennart
  • Wazinski, Friedrich-Philipp
  • Saggu, Aman

Abstract

This paper investigates retail investor motivations for digital real estate ownership in the crypto-metaverse. Utilizing a detailed financial behavior survey of metaverse landowners' intrinsic and extrinsic motivations, we apply principal components analysis to uncover four distinct motivational groups: (1) Aesthetics and Identity, (2) Social and Community, (3) Speculation and Investment, and (4) Innovation and Technology. Our findings reveal that age, education, investment knowledge, risk-taking, and impulsivity significantly influence investor group membership. This research provides valuable insights to investors and developers, underscoring the potential of a platform to attract retail investors with speculative intentions, engagement longevity, and passive or active trading characteristics, contingent on unique crypto-metaverse attributes.

Suggested Citation

  • Ante, Lennart & Wazinski, Friedrich-Philipp & Saggu, Aman, 2023. "Digital real estate in the metaverse: An empirical analysis of retail investor motivations," Finance Research Letters, Elsevier, vol. 58(PA).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323006712
    DOI: 10.1016/j.frl.2023.104299
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    More about this item

    Keywords

    Metaverse; Digital real estate; Virtual land; Non-fungible tokens (NFTs); Retail investors; Cryptocurrency;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • R39 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other

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