Self-induced consensus of Reddit users to characterise the GameStop short squeeze
arXiv:2112.07059 · doi:10.1038/s41598-022-17925-2
Abstract
The short squeeze of GameStop (GME) shares in mid-January 2021 has been primarily orchestrated by retail investors of the Reddit r/wallstreetbets community. As such, it represents a paramount example of collective coordination action on social media, resulting in large-scale consensus formation and significant market impact. In this work we characterise the structure and time evolution of Reddit conversation data, showing that the occurrence and sentiment of GME-related comments (representing how much users are engaged with GME) increased significantly much before the short squeeze actually took place. Taking inspiration from these early warnings as well as evidence from previous literature, we introduce a model of opinion dynamics where user engagement can trigger a self-reinforcing mechanism leading to the emergence of consensus, which in this particular case is associated to the success of the short squeeze operation. Analytical solutions and model simulations on interaction networks of Reddit users feature a phase transition from heterogeneous to homogeneous opinions as engagement grows, which we qualitatively compare to the sudden hike of GME stock price. Although the model cannot be validated with available data, it offers a possible and minimal interpretation for the increasingly important phenomenon of self-organized collective actions taking place on social networks.
References in corpus (16)
- Epidemic spreading in scale-free networks
- Twitter mood predicts the stock market
- Statistical physics of social dynamics
- The science of fake news
- Mixing patterns in networks
- Extracting the multiscale backbone of complex weighted networks
- Reality Inspired Voter Models: A Mini-Review
- Recent advances in opinion propagation dynamics: A 2020 Survey
- The Emergence of Consensus: A Primer
- Theory of collective opinion shifts: from smooth trends to abrupt swings
- The Doge of Wall Street: Analysis and Detection of Pump and Dump Cryptocurrency Manipulations
- Emergence of polarization in a voter model with personalized information
- Extracting significant signal of news consumption from social networks: the case of Twitter in Italian political elections
- Opinion Formation under Antagonistic Influences
- Evolutionary network games: equilibria from imitation and best-response dynamics
- WallStreetBets: Positions or Ban