This is the standard "herding" hypothesis, that public behavior ignore private signals once public signals have become lopsided enough.
Alas, there is nothing new under the sun. I'm guessing the herding hypothesis also says that only very strong private signals can override the public ones too. So, if this is an old hypothesis well-known to you, why would you then lament the herding? If herding is the case, then not updating (much) after a certain point gives you better results than continuing to update, doesn't it? And if it does, then wouldn't that 'win' and be the rational thing to do given the circumstances?
(Alternate question: if not-updating is rational, why resort to social signalli...
Bryan Caplan writes:
Robin Hanson offers an explanation:
I wonder, what does this look like in the cross section? In other words, relative to other academic disciplines, which have the strongest tendency to celebrate difficult work but ignore sound-yet-unimpressive work? My hunch is that economics, along with most other social sciences, would be the worst offenders, while the fields closer to engineering will be on the other end of the spectrum. Engineers should be more concerned with truth since whatever they build has to, you know, work. What say you? More importantly, anyone have any evidence?