If someone had a strategy that took two years, they would have to over-bid in the first year, taking a loss. But then they have to under-bid on the second year if they’re going to make a profit, and—”
“And they get undercut, because someone figures them out.”
I think one could imagine scenarios where the first trader can use their influence in the first year to make sure they are not undercut in the second year, analogous to the prediction market example. For instance, the trader could install some kind of encryption in the software that this company uses, which can only be decrypted by the private key of the first trader. Then in the second year, all the other traders would face additional costs of replacing the software that is useless to them, while the first trader can continue using it, so the first trader can make more money in the second year (and get their loss from the first year back).
I think one could imagine scenarios where the first trader can use their influence in the first year to make sure they are not undercut in the second year, analogous to the prediction market example. For instance, the trader could install some kind of encryption in the software that this company uses, which can only be decrypted by the private key of the first trader. Then in the second year, all the other traders would face additional costs of replacing the software that is useless to them, while the first trader can continue using it, so the first trader can make more money in the second year (and get their loss from the first year back).