A hedonic valuation perspective on NFTs
The second way to look at NFTs is through its hedonic value. There’s a 2012 paper that examines this idea as it relates to World of Warcraft and in-game items. A player was given a shield from her friend. This shield is actually a pretty common item, but the player didn’t want to drop, destroy, or sell the shield. In her mind, even if she could easily buy the same shield, its value won’t be the same as the gifted one.
I like this example because it clearly outlines the hedonic elements of digital scarcity. It matters to the player where she got the shield. For most digital things, like money, this intrinsic, hedonic value wouldn’t make sense. With NFTs, things that were once treated as interchangeable on the digital space, like a gifted shield or a virtual collectible, are allowed to exist with this added value that is appealing to a buyer or owner.
The hedonic aspect of value seems very abstract, which is probably why people don’t mention it as much as the functional approach. What stuck out to you about this idea of hedonic value?
I would say there’s even a hedonic approach to the idea of provenance, which a lot of artists and NFT creators emphasize. There’s this story about the Mona Lisa, how it was once hung on Napoleon’s bedroom wall, and the painting’s history and association with him brought it great cultural value.
I’m going to drop a very jargony word here, which is called “biographical indexicality.” In the theory of collectibles, the idea is that people like collectibles because they have some sort of biographical element that indexes some important events in the past or its relation to a person’s life in history. The fact that this notion is being applied in the digital space through NFTs is just really exciting to me.
