Can self selection create high-performing teams?

Does the way that teams are formed affect their productivity? To address this question, we run an experiment comparing different methods of team formation: (1) random assignment; (2) self selection; and (3) algorithm assignment designed to maximize skill complementarity. We find that self selection creates high-performing teams. These teams perform better on a team task than randomly-assigned teams and as well as those assigned using the algorithm. Exploring the mechanism, we find evidence that, when given the choice, individuals self select into teams primarily based on their social networks and exert higher effort towards the team task.