Author (Your Name)

Chris Zhu, Colby CollegeFollow

Date of Award


Document Type

Honors Thesis (Open Access)


Colby College. Economics Dept.


Professor Timothy Hubbard

Second Advisor

Professor Yang Fan


A theoretical analysis of a dynamic double auction over time shows that greater market density can result in more aggressive trading strategies from buyers and sellers. In addition, my model suggests a fast price discovery period initially, with impatient investors having a more aggressive approach. I confirm these results using resale sneaker data from the StockX website for five deadstock sneakers. I find that market density is positively correlated with bid prices, and the bid-ask spread decreases over time during the price discovery period. However, the results also indicate that sellers price in additional transaction costs and lags in their asking prices. This leads them to increase their ask prices even with more sellers in the market. Hence, an NFT marketplace can improve efficiency and welfare significantly by introducing a faster and cheaper trading experience. The dynamic double auction model fits well in the contents of the NFT marketplace.


Sneaker, Auctions, NFT