Cognitive ability, financial literacy, and narrow bracketing in time-preference elicitation

• In an incentivized experiment relying on the Convex Time Budget protocol, we document substantial heterogeneity in choice-patterns and estimated parameters at individual-level. Cognitive reflection financial literacy are associated with more patient intertemporal choices. choice patterns that suggest violations of narrow bracketing assumption (i.e., allocate entire budget to a single payment-date corner choices as interest rates increase). Thus, cognitive may be potential confounds time-preference elicitation tasks time-dated monetary rewards. We study role ability for inter-temporal decision-making using adapted version Protocol. individual-level: Subjects higher likely make choices, payment-date, increase. At same time, is uncorrelated consistency individual error parameters, suggesting these results not driven by reduction random noise among high respondents. These serve suggestive evidence arbitrage respondents, thereby revealing confound