economics Practical Magic

Luxury brands keep their 'cool' factor much better by giving digital stuff away for free than by selling it for cheap.

March 25, 2026

Original Paper

Free Isn't Cheap: Zero Pricing Protects Luxury Brands in Blockchain-Based Digital Collectible Extensions

Reo Fukuda, Naoki Akamatsu, Satoko Suzuki

SSRN · 6195219

The Takeaway

Usually, luxury is equated with high price tags, but in digital markets like NFTs, a 'cheap' price creates a permanent low anchor that devalues the brand. Giving items away for 'free' bypasses the consumer's price-quality math entirely, allowing a brand to maintain its elite status even while distributing items widely.

From the abstract

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 s