[burroisolator]

Perhaps my argument can be simplified as follows. If everyone had the same models, they would pick the investment with the highest ROI adjusted for risk (ignoring externalities). That same investment is now not available for someone else: they now have to take the second best.

[aeternus]

Thanks for the explanation, your argument makes sense.

I'd just look at it in a slightly different, perhaps more optimistic way. The fact that this investment has the highest ROI means that society as a whole would benefit from injecting additional capital into that investment.

In that sense, you're right that other investors have a less desirable price. However in theory at least, everyone is better off since that investment now has more capital, and is able to produce more output, positively contributing to the overall economy and increasing the size of the overall pie.