Abstract: We conduct a real-effort experiment where participants choose between individual compensation and team-based pay. In contrast to tournaments, which are often avoided by women, we find that women choose team-based pay at least as frequently as men in all our treatments and conditions, and significantly more often than men in a well-defined subset of those cases. The higher attraction of women to co-operative incentives across experimental conditions results from their relative lack of confidence and more optimistic assessments of their prospective teammate’s ability, which increases the expected profitability of teamwork. 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
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