The basic crossbow does not have a slot for a sight.
However, the makeshift crossbow, heavy crossbow, composite crossbow, and compound crossbow are other full sized crossbows that can accommodate a sight.
That’s probably why you can’t install it. Try making your own crossbow. It requires marksmanship 4 to install, though, so you might still not be able to put the sight on one of the alternate crossbows.
