"Do you have an argument/explanation for this? Also, why are the quant systems necessarily betting against each other?" The firms with the good models in the s

"Do you have an argument/explanation for this? Also, why are the quant systems necessarily betting against each other?" The firms with the good models in the system will tend to keep prices near their optimal values by trading amongst each other so when the dumber investor makes his trades he will get near these prices. It's like in the allegory when the lines are at their optimal because there are enough individuals with knowledge of the fast line, a person that doesn't know about the fast line picking at random will get some benefits because the line lengths are already optimized. "Would you use the same argument to conclude that the space of internet startups will shrink?" As an example, consider the bigger gaming firms which now have difficulty competing in the mobile gaming market because the whole process has become too efficient for firms that are capital intensive. On the customer's side of things, they get to chose from a huge library of games most costing less than the price of a cappuccino. More games for less money, that's market efficiency. I guess you could say that if the investment opportunities grow as a whole, the quant market could grow with it but it should shrink relative to it as it gets more competitive. Also, what yummyfajitas said.