Individual or team decision-making - Causes and consequences of self-selection

Even though decision-making in small teams is pervasive in business and in private life, little is known about subjects’ preferences with respect to individual and team decision-making and about the consequences of respecting these preferences. We report the results from an experimental beauty-contest game, where subjects could endogenously choose their preferred way of decision-making. About 60% of subjects prefer to act in a team, and teams win the game significantly more often than individuals. Nevertheless, both individuals and team members are highly satisfied with their chosen role, but for different reasons. JEL classification: C72, C91, C92, J21, M54