B-CALM: Bias-Limited Bayesian Borrowing for RCT-Anchored Treatment Effects under Covariate Mismatch

Randomized controlled trials (RCTs) identify treatment effects in the randomized trial population but are often too small for reliable heterogeneity estimation; observational studies (OS) are larger but confounded and measured on only partially overlapping covariates.

We develop Bayesian Calibrated ALignment under covariate Mismatch (B-CALM), a Bayesian borrowing method for RCT-defined conditional average treatment effect (CATE) estimation.

B-CALM maps source-specific covariates into a shared latent state, jointly models trial and observational outcome surfaces, and uses baseline-bias and comparative-bias functions to represent how the OS departs from the trial estimand.

The comparative-bias prior becomes an explicit sensitivity knob: we prove a finite-feature bias-limited information bound showing that observational contrast information about the trial treatment-effect function is capped by the prior precision of this bias function, and derive an effective-sample-size formula showing that the RCT-equivalent information contributed by the OS saturates as OS sample size grows.

The theory also combines a PAC-Bayes trial-risk bound with an integral-probability-metric (IPM) alignment and calibration decomposition that separates RCT empirical risk, latent alignment, and residual calibration of the debiased OS surface.

In synthetic, semi-synthetic, and pediatric-obesity external-control studies, B-CALM maintains near-nominal average coverage and low negative transfer while pooled and causal-forest baselines can become overconfident under comparative bias.