AQR quant on the network effects behind GameStop frenzy

Rob Mannix
@RobMannix
17 Mar 2021

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The wild swings in GameStop stock in recent months may hold the key to a better model for asset pricing in financial markets, according to a top quant at AQR.

Lasse Pedersen, a principal at the $140 billion investment firm, says the 2,000%-plus rally in GameStop shares in January and its six-fold climb in March can be explained by network effects that are also behind broader patterns in markets, such as momentum and mean reversion.

“GameStop was an eye-opener,” he says. The episode showed that

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