Early CAPM believers later turned against it through theoretical work

Evidence

Roll had begun by sharing the “euphoria” of the early 1970s about the model: “I was pretty much a believer in this being a panacea for everything, for asset pricing.” (Roll interview) However, while Roll was doing theoretical work on asset pricing in the mid 1970s, his doubts began to grow. — Donald MacKenzie, An Engine, Not a Camera, 402

Categorization

• XREF: connects to: Even a model’s creator initially refused its empirically unpalatable conclusions — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 248; Fama-French replaced CAPM’s beta with size and book-to-market factors. — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 431; The CAPM was embraced in Chicago but regarded skeptically at MIT — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 587 (+2 more)

Broader Connections

• Black and Scholes doubted CAPM’s accuracy while building their model on it #exemplifies (0.90) — Donald MacKenzie, An Engine, Not a Camera, 1116
• The CAPM may be true but can never be empirically tested #qualifies (0.75) — Donald MacKenzie, An Engine, Not a Camera, 404