Nov 27, 2024 Story by: Editor
Researchers from Carnegie Mellon University have uncovered significant gender and racial disparities in the pricing of avatars in the non-fungible token (NFT) marketplace, according to a new study. Published in the International Journal of Research in Marketing, the study offers insights into how avatars’ features influence transaction prices and suggests strategies for promoting equity in the digital market.
The research, conducted in collaboration with New York University and Harvard University, examined whether the NFT marketplace—often populated by younger, wealthier, and politically progressive individuals—is less prone to societal biases. Yuan Yuan, a Ph.D. student in marketing at Carnegie Mellon and the study’s lead author explained, “As the NFT market continues to grow and increasingly leverages digital communities as brand assets, such questions will become increasingly important.”
Focusing on the popular CryptoPunks NFT collection, the researchers found that avatars depicting women were sold at prices 37% lower than male avatars with similar features. Similarly, Black avatars fetched 31% less than their white counterparts. These findings were corroborated in a controlled lab experiment, which confirmed both gender and racial price disparities and identified racial bias as a key factor in purchasing decisions.
The study also found that avatars with attributes linked to high-tech or higher education, such as 3D virtual reality headsets or “nerd” glasses, were less impacted by these biases. These features appeared to counteract the disparities, suggesting that incorporating such elements into avatars could reduce prejudice in the marketplace.
“These findings challenge the perception that biases diminish in technologically advanced marketplaces,” said Kannan Srinivasan, a professor at Carnegie Mellon and co-author of the study. “By introducing attributes that counteract bias and adopting equitable guidelines, NFT platforms can create a more balanced marketplace.”
The study highlights the persistence of societal stereotypes in digital marketplaces, particularly the devaluation of Black avatars across different buyer demographics. It emphasizes the complexity of these biases in a space often regarded as progressive and innovative.
Despite its contributions, the research acknowledges certain limitations, including difficulties in distinguishing between factors perceived as more valuable versus personally preferred. Additionally, the study focused exclusively on human avatars, and its database may not fully represent the broader population.
The findings offer actionable strategies for NFT creators and platforms to combat bias, potentially fostering a more inclusive and fair marketplace. “NFT platforms that want to harmonize efficiency with fairness can also adopt policies that discourage bias, providing more equitable guidelines for the creation and transaction of NFTs,” added Srinivasan. Source: CMU
