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

Even though decision-making in small teams is pervasive in business and 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 them preferred to decide in a team, and teams won the game significantly more often than individuals did. Nevertheless, both individuals and teams were highly satisfied with their chosen role, though for different reasons. Keywords: Beauty-contest game; Team decision-making; Individual decision-making; Endogenous choice; Experiment JEL classification codes: C72; C91; C92; J21; M5