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Are Prediction Markets Well-Calibrated? I Analyzed 7,661 Resolved Polymarket Markets
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Are Prediction Markets Well-Calibrated? I Analyzed 7,661 Resolved Polymarket Markets

DEV Community·John Leslie·about 1 month ago
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By John Leslie Prediction markets are booming. Polymarket alone processes billions in volume. But a fundamental question remains: when a market says there's a 60% chance of something happening, does that event actually happen 60% of the time? I pulled 7,661 resolved binary markets from Polymarket's API, grabbed price history for the top 2,000 by volume, and built an interactive calibration tracker to find out. Try it here: Polymarket Calibration Tracker What is calibration? A forecaster is well-calibrated if their predicted probabilities match observed frequencies. If you say "70% chance" for 100 different events, roughly 70 of them should happen. Perfect calibration means every point sits on the diagonal line where predicted = actual. This is the gold standard metric for forecast quality, used everywhere from weather forecasting (the NWS publishes calibration curves) to machine learning model evaluation.…

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