A large, multinational cooperation wants to enable it's executives to get more creative in pursuing the companies goals. So an internal prediction market is established:
- starting at lower management, part of the salary is not paid directly but in form of tokens for a company-internal prediction market
- managers bet on real world events and outcomes of the companies projects, if and when they happen (will x win this election? will the second quarter be beter or worse then the first? will department y finish project z on time and on budget?)
- payouts are paid in real money
- only participants can see the bets, each bet is anonymous (the betting office is it's own legal entity, though of course once the payouts reach the winner of a bet banks, law enforcmeent or management high enough up the food chain could break the anonymity)
- the overt motivation is that it forces managers to think hard, with skin in the game, about the outcomes of actions, including their own
- the thing is - ostensibly - anonymous so a junior executive can bet against their managers project if they think it will fail, without fear of reprisal
- the actual goals is a sort of assassination market - Bob bets on a certain sale happening within a specific week, then goes on to bribe the procurement person on the clients side with his own money to make it happen
- to make this work, senior executives and major stakeholders also "play" in the prediction market, betting against outcomes they want (like Bob making the sale) to ensure that initiative shown is rewarded
- If Bob gets caught, he's immediately thrown under the bus - clear breach of the compliance handbook, how is it the companies fault what he does with the money earned in the prediction market etc.
A law against such a prediction market can surely be written, or has been written. That's not what this question is about. The question is, how could someone game this system (possibly using the contradiction between the overt function where everyone bets on what they think will happen and the covert function where everyone bets against outcomes they want) to get rich in a way that is not in the shareholders interest?