  We investigate how to efficiently set up work groups to boost group
productivity, individual satisfaction, and learning. Therefore, we conduct a
natural field experiment in a compulsory undergraduate course and study
differences between self-selected and randomly assigned groups. We find that
self-selected groups perform significantly worse on group assignments. Yet,
students in self-selected groups learn more and are more satisfied than those
in randomly assigned groups. The effect of allowing students to pick group
members dominates the effect of different group compositions in self-selected
groups: When controlling for the skill, gender, and home region composition of
groups, the differences between self-selected and randomly formed groups
persist almost unaltered. The distribution of GitHub commits per group reveals
that the better average performance of randomly assigned groups is mainly
driven by highly skilled individuals distributed over more groups due to the
assignment mechanism. Moreover, these highly skilled individuals contribute
more to the group in randomly formed groups. We argue that this mechanism
explains why self-selected groups perform worse on the projects but acquire
more knowledge than randomly formed groups. These findings are relevant for
setting up workgroups in academic, business, and governmental organizations
when tasks are not constrained to the skill set of specific individuals.
