How Calibration Bias Creates Persistent Edge on Kalshi (2026 Deep Dive)
The Core Finding
Across nearly all price levels on resolution markets, the crowd's implied probability overstates the true win rate. In plain terms: YES is systematically a touch too expensive. This is calibration bias, and it is persistent because it is behavioral, not a one-off glitch.
Why It Persists
- Buyers outnumber sellers emotionally (optimism, lottery-like payoff).
- NO inventory is harder to source at scale.
- Mid-range prices (0.35–0.65) are where the gap is widest.
How OddsPit Uses It
Our Calibration Bias signal blends a theoretical curve with our own resolved-market history, sharpening automatically as more outcomes settle. It fires hardest in the mid-range where no other signal disputes it.
Practical Play
When Calibration Bias is the top contributor to a score, lean NO or sell YES — but always confirm liquidity and expiry first.
FAQ
Does it work on every market? No. Thin or terminal markets break the assumption; the signal self-suppresses there.
