Abstract

Aggregate productivity depends on whether productive inputs are allocated to their highest-value uses. We document a novel form of misallocation within a single individual performing a cognitively demanding task over time. In an online experiment, participants complete a 30-question mathematics exam with random question order and randomly timed enhanced incentives (“bonus boosts”). Performance falls by 9.5 percentage points from the first to the last question, and 82 percent of participants exhibit a decline. Yet 58.0 percent of participants report no preference over when to receive bonus boosts, and willingness to pay for these boosts does not differ significantly across timing options. This indifference is costly: assigning boosts early rather than late raises expected bonus earnings by 9 percent. The misallocation aligns with miscalibrated beliefs about productivity: pre-exam forecasts imply constant performance, and post-exam hindcasts capture only 55 percent of the actual decline. These findings identify miscalibrated beliefs about within-worker productivity trajectories as an under-recognized source of misallocation.