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• #VOX GAMESTOP FREE#

The lens of social behavior helps a lot in doing exactly that.GameStop’s stock market explosion, explained Those fretting about the financial consequences of the GameStop debacle should take a step back and see these expressions of discontent for what they truly are. Crises of legitimacy disrupt the social order and make policy-making (as well as investing, and corporate management) harder than it should be traditional incentive structures no longer function as they should, and responses become much more volatile and unpredictable.

Revolution feels necessary when the system is deaf to appeals for peaceful, gradualist change. Whether it is overtly populist politics or rag-tag investors, the discontent is real and there is a lot on the line. And disparaging this kind of trading because it treats stock markets like a casino is unlikely to bring down the temperature among folks who probably felt that way about 2008. Barring people from trading the stocks actually makes it worse, since it only fuels pent-up energy for further self-expression. Where do we go from here? If we want investors to only follow “economic” reasons (and cool off the dangers associated with hyper-fluctuating markets), we need to handle the underlying legitimacy crisis. People will make their voices heard wherever the power is as power shifts from the ballot box to the marketplace, we should expect their self-expression to follow along with it.

#VOX GAMESTOP FREE#

With governments painted as the problem since the 1980s, and free markets as the solution, this kind of investor activism can be interpreted as exactly what one should expect. Historically, though, this logic shows an affinity to conservative ideology. Investors can become activists, using their trades as a way to voice their grievances. Those are all economic reasons: reasons to believe that the investment will make money.īut in a crisis of legitimacy, profit-seeking no longer predicts human behavior. What exceptional reasons might investors have? Under normal circumstances, exceptional reasons might include a belief that the company will rally, that it’s currently undervalued, that the sector as a whole is positioned for growth, etc. We should expect investors to follow the herd unless they have an exceptional reason to do otherwise. Institutional investors short the stock they think the company will do poorly. Let’s bring this discussion back to the present, and see if it helps us to understand what’s going on with GameStop. In fact, people will act against their own interests if it means sticking it to their champion. It isn’t necessarily an indication of which policy ideas they support. Their vote for the candidate is an expression of their identity and their anger. They begin to view the candidate as a champion for those without a voice. The more flagrant the lie, the more effective it is with disenchanted voters. Flaunting the most central rules of the system is a diss to institutional norms and a cheap shot at the insiders who run the place.

In such a legitimacy crisis, voters will support a candidate who lies. The system appears corrupt, run by insiders who only care about their own interests. When people are ignored, they feel that the system doesn’t represent their interests. If the lie is exposed the candidate loses valuable credibility.īut a group of researchers found a circumstance where lying actually improves the candidate’s chances at the polls: crises of legitimacy. In the “rational” model of voting, lying is extremely risky. Following Brexit and the election of Donald Trump, many researchers asked themselves how so many voters could support candidates who lied openly in public discussions. This kind of economically “irrational” action isn’t unique to Gamestop or even to financial markets. Why? Because it’s the only thing they can do that ever seems to get heard. Who’s buying GameStop stocks? A lot of people who feel left behind by the markets. But sometimes making money isn’t all that it’s about.

Any individual investor should reason that the stock is likely to lose money, considering the moves made by elite investors.