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Somewhat related but tangential: What would happen if we had a "double blind" system where people could receive insider trading information based on karma poin
by harshaw 13y ago
Somewhat related but tangential:
What would happen if we had a "double blind" system where people could receive insider trading information based on karma points? The idea is that a system would anonymously give out insider trading information to one or more people with the highest amount of karma. The granter of the stock tip would get a corresponding boost (or drop) in karma based on the value of the knowledge but couldn't benefit from the insider information directly with the exception in the future they would have a greater likely hood of getting anonymous insider information based on their karma point count.
example:
1) Alice creates an anomymous tip that Apple stock is likely to drop due to an unexpected sales decrease of the iphone 6.
2) The system establishes an initial weight for the stock tip based on company valuation and reliability of Alice.
3) The system identifies a user or set of users with the highest current karma points. Bob is one of these users. Bob's karma point total is reduced by the value of the recommendation.
4) Later on after banking a large number of points Alice is given a tip that Tesla stock is expected to rise. Alice is able to profit on this insider knowledge without... really having insider knowledge
This is somewhat akin to profiting off of documents in the back seat of a taxi. Since this seems like somewhat of an obvious system I wonder if it is practiced in real life and what law enforcement does to counter it....