I’m watching this play out in financial markets right now. It’s the newest form of the crowded trade. When everyone optimizes against the same signal, individual returns go up right until the aggregate return of the signal decays. And now that fundamental managers and quants alike are wiring the same language models into their workflows, decisions are being influenced in the same direction, and it leaves a fingerprint in market behavior.
Crowded trades and crowded research share the same root. The reward is easier to measure than the thing it proxies for. Returns are easier to measure than durable edge, and citations are easier to measure than discovery, so everyone digs the same hole deeper. Which leaves the study’s real question. Are citations measuring discovery at all, or just the crowd?
Crowded trades and crowded research share the same root. The reward is easier to measure than the thing it proxies for. Returns are easier to measure than durable edge, and citations are easier to measure than discovery, so everyone digs the same hole deeper. Which leaves the study’s real question. Are citations measuring discovery at all, or just the crowd?