Kalshi releases largest study on prediction markets’ reliability

Kalshi just dropped what it calls the largest analysis of prediction market accuracy ever conducted, covering more than 300,000 contracts with transaction-level data. The takeaway: prediction market prices are genuinely informative estimators of real-world probabilities. The caveat: if you’re buying cheap lottery-ticket contracts, you’re probably lighting money on fire. The study, authored by researchers Bürgi, Deng, and Whelan, digs into a question that’s been central to the prediction market thesis since its inception. Can crowds of bettors putting real money on the line actually produce better forecasts than polls, pundits, or professional analysts? Kalshi’s answer, backed by its own data, is a qualified yes. The numbers behind the claim The core finding is straightforward: Kalshi contract prices track realized outcomes with meaningful accuracy. When a contract trades at 70 cents, the associated event tends to happen roughly 70% of the time. But the accuracy isn’t uniform across a contract’s lifespan. Mean absolute pricing errors drop sharply on the final day of trading before a market resolves. In plain terms, prediction markets get dramatically better at their job right before...