GameStop: A Story of Angry Revenge to Punish Unfairness

People will punish unfair actions by others, even hurting themselves to do so.

Posted Jan 30, 2021 | Reviewed by Lybi Ma

Where’s my pitchfork? Bring the tar and feathers. GameStop is a story of how people work to punish unfair bullies. Even if they risk hurting themselves, they will try to punish unfair actions.

The game is rigged. The little guy has almost no chance. The big people control the systems and run an unfair race in which they always win. But David grabbed his sling to punish the unfair Goliath. We’ve all been angry about being treated unfairly. GameStop is a story of people punishing an unfair system.

Have you seen the news about the wild ride GameStop stock has taken in the last few weeks? The stock, which had been trading at under $10 per share, is now $300. That’s a huge increase. But buying this stock isn’t rational. It’s inconsistent with utility theory. According to utility theory, people evaluate risk and possible benefits. They make a decision considering all reliable information. They strive to be as rational as a computer evaluating the same risks. Clearly, this is wrong. People don’t work this way.

Buying GameStop stock isn’t a rational decision. It’s a bad investment. GameStop sells physical games when games are now sold online. They rely on stores in a pandemic when people avoid being inside. The smart bet was that the already low stock price would continue to drop.

So why people are buying this stock at increasing prices anyway?

Maybe you’ve noticed the economic system is unfair. The pandemic year has made it clear. Most people are hurting. They’ve lost their jobs, can’t pay rent, and are food insecure. Over 400,000 people have died. But the stock market has continued climbing. The billionaires are doing fine, and have profited by huge amounts. It is easy to feel that the game is unfair and rigged against the average person.

When people perceive they are being treated unfairly, they will respond by punishing the offender. They will try to punish the offender even if they have to hurt themselves to do it. People will throw away their own money if that means punishing an unfair offender. Joseph Henrich and his colleagues (2006) have studied how people respond to unfairness by others. They set up a simple game. Two people are going to be given money. Player 1 can decide what share to keep and how much to give to the other person. Payer 2 can decide whether to accept the offer. If they accept, everyone gets money. If they reject, no one gets money. When the person controlling the payout is a jerk and offers only a small portion to the other person, that is rightly perceived as unfair. After all, no one had to work for the money and it was offered to both. In that case, the other player will reject. They will turn down free money to punish the other person.

If you’re a jerk and I have the opportunity to harm you in response, I will do it. Even if it costs me some money. And in the research by Henrich et al., this is an effect that shows up in every culture they’ve tested. People really don’t like when others behave unfairly. Henrich and colleagues argue this is important for cooperative societies – people must be required to treat others fairly.

But in the real world, it can be hard to punish people who are unfair. How can the little people cost the rich people any money in the stock market?


GameStop is a real-world demonstration of punishing unfair others. With GameStop, rich hedge funds made large bets that the price of the stock would continue to fall (they engaged in short-sells). If the stock loses money, then they make money. In contrast, if the stock gains value, they will lose a lot of money. And if it rises a lot, they lose billions.

Some small traders discovered that the hedge funds had these huge risks. They started buying up GameStop stock. This led the stock to rise in price. On Wall Street, this is called a short squeeze. You squeeze the person who has a bet on the stock falling. Big traders do this to each other sometimes. But now the small traders have attacked some large hedge funds. And the hedge funds have been hemorrhaging money. They really have lost billions.

I looked at leading comments on the Reddit page of the small traders talking about this. Most have small amounts of money invested. Their trades have netted them huge profits, at least on paper so far. But that’s not their goal. They are aiming to punish the unfair rulers of Wall Street. Many state that they don’t care if they lose their small investments if it means the hedge funds lose substantially more. They will give up a small amount (their original investment) to make sure that the hedge funds get hit really hard. Punish those they perceive as being unfair.

There are lots of motivations for GameStop’s huge increase in stock value. Some are aiming to punish those they see as unfair. Others see this as a joyride. They started with the goal of attacking the hedge funds. But now, they are having fun on the ride. And some have clearly jumped on the opportunity to make money as the stock price increases.

But at heart, reading the comments of people who started this, they were trying to right the wrongs of our unfair economy. They see themselves as David, trying to take down Goliath. And we always enjoy rooting for the underdog. Why? Because we also see the system is unfair. We want to see balance restored.


Henrich, J., McElreath, R., Barr, A., Ensminger, J., Barrett, C., Bolyanatz, A., ... & Ziker, J. (2006). Costly punishment across human societies. Science, 312 (5781), 1767-1770.