What you eliminate in your scenario is what I call the Fidget Factor. According to the IIG the target didn't actually know he was a target. Maybe he found out. I figure that at any given time she could have noticed fidgeting in about half the people. Of course, one could also argue that the Fidget Factor might be intensified when the person is the only person on stage rather than just being one of six.That's true, and I'm not a salesman. My personal opinion is that you reduce the chance for a cold read by decreasing the amount of time the claimant has to make comparative evaluations. If that means increasing the occurrences for which the claimant can make accusations about cheating so be it. I say it's easier to deal with those claims than explaining why they were able to make a cold read and get a "hit".
I think you are dismissing the ramifications of protocol violations too lightly. They can put the IIG at financial risk. Remember, this is a contract. If they don't uphold their end of the contract, they may have to refund the money Anita gave them and possibly pay some damages. If she got really lucky and they also screwed up, the entire $50K could be at risk.
It's not like a "mea culpa" relieves them of liability.
I'd never go that low. We clearly had a delusional claimant in this case, but you have to be very wary of, well, let's just say "people who may have developed a real skill that they are trying to pass off as paranormal to make some cash."With regards to this recent success, I think the IIG should be considering what kind of preliminary odds they need to give in order to encourage more challenge participants. Perhaps halving the prize to $25K and increasing the odds to 200 to 1 may be in order.
You also have the very real risk of collusion. The lower the odds requirement, the easier it is to pull off. It's not just the financial issue, since that requires a second act of collusion. Just passing the preliminary would be viewed as a major accomplishment for the woos and make a bunch of fence sitters take notice. Plenty of True Believers have faked things because that's the only way to get the attention of the unenlightened. By that I mean some followers in cults have excused shenanigans because it was for the greater good, which in the case of the IIG would be trying to get the government to fund "real" paranormal research.
And, of course, why risk somebody exploiting a minor information leak and getting lucky? Talk about giving ammunition to the other side!