
AQR quant on the network effects behind GameStop frenzy
New model captures how ‘fanatical’ investors can influence asset prices

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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