ABSTRACT

Recent high-impact discoveries and inventions arise from the combined work of many innovators organized in diverse teams. However, a bigger team group size is not always better, especially when coordination becomes challenging. We conducted an experiment to test the impact of group size, task complexity, and the magnitude of payoffs on individual and group completion of a creative task. We find that individual effort in small teams is significantly higher than in medium-sized and large teams, but mid-sized groups performed better than small and large groups. The magnitude of payoffs significantly affects individual effort but not group effort. Meanwhile, task complexity matters for large groups but not for small and medium-sized groups. The study offers recommendations on incentives to improve individual and group productivity.