Market crashes drove practitioners to adopt academic beta research.

Evidence

The reviving fortunes and renewed glamor of the stock market in the 1950s and the 1960s may have increased its attractiveness as an academic research topic. The sharp reversal of those fortunes at the start of the 1970s seems greatly to have increased practitioner interest in the practical results of this research. After what had happened, for institutional investors to know the beta values of their portfolios began to seem sensible. Well-established firms began to move into the field, realizing that betas could, literally, be sold. — Donald MacKenzie, An Engine, Not a Camera, 365

Categorization

• XREF: Connects to the performativity thesis: here we see the demand-side motivation for finance theory becoming practical — a bridge to how models shape markets through adoption. — connects to: As arbitrage opportunities dried up, traders imported academic theory wholesale — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 968

Broader Connections

• As arbitrage opportunities dried up, traders imported academic theory wholesale #expands (0.82) — Donald MacKenzie, An Engine, Not a Camera, 968