Abstract

We conduct a real-effort experiment where participants choose between individual compensation and team-based pay. In contrast to tournaments, we find that women choose team-based pay at least as frequently as men in all our conditions and significantly more often in a well-defined subset of conditions. Women's greater attraction to co-operative incentives results in part from their more optimistic assessments of their prospective teammate's ability. Women also respond differently to alternative rules for team formation in a manner that is consistent with advantageous inequity aversion. In contrast, men show a greater responsiveness to efficiency gains associated with team production.

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