Arxiv: https://arxiv.org/abs/2112.07059
Project page: http://www.riccardodiclemente.com/wallstreetbets.html
The short squeeze of GameStop (GME) shares in mid-January 2021, primarily orchestrated by retail investors of the Reddit r/wallstreetbets community, 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.
We then introduce a model of opinion dynamics where user engagement can trigger a self-reinforcing mechanism leading to the emergence of consensus on the short squeeze operation. We observe a clear phase transition from heterogeneous to homogeneous opinions as engagement grows, with the presence of hubs easing the formation of diffuse consensus.