Yes, this example does illustrate this point. As I acknowledge later in the article:
> This turns out to be a general lesson from running a corporate prediction market. Forecasting internal progress, and acting on that information, requires solving complex operational problems and understanding the moral mazes that managers face. Forecasting competitors’ progress has almost none of these problems.
Forecasts on competitors (or, say, regulators) avoids this problem... unless employees are manipulating the outside world too!
Yes it has fewer problems, but not 0. The social network between competitors can be quite tight because the communities involved are so small. So the predictions can be used as social taunts or challenges. Similarly, I can conspire with my friends working for said competitors to game the system to win the prize if the prize is valuable enough.
Basically, betting markets have all the problems and risks of traditional public markets (insider trading) without any of the regulation or ability to enforce the law.
> This turns out to be a general lesson from running a corporate prediction market. Forecasting internal progress, and acting on that information, requires solving complex operational problems and understanding the moral mazes that managers face. Forecasting competitors’ progress has almost none of these problems.
Forecasts on competitors (or, say, regulators) avoids this problem... unless employees are manipulating the outside world too!