  We study the use of Bayesian persuasion (i.e., strategic use of information
disclosure/signaling) in endogenous team formation. This is an important
consideration in settings such as crowdsourcing competitions, open science
challenges and group-based assignments, where a large number of agents organize
themselves into small teams which then compete against each other. A central
tension here is between the strategic interests of agents who want to have the
highest-performing team, and that of the principal who wants teams to be
balanced. Moreover, although the principal cannot choose the teams or modify
rewards, she often has additional knowledge of agents' abilities, and can
leverage this information asymmetry to provide signals that influence team
formation. Our work uncovers the critical role of self-awareness (i.e.,
knowledge of one's own abilities) for the design of such mechanisms. For
settings with two-member teams and binary-valued agents partitioned into a
constant number of prior classes, we provide signaling mechanisms which are
asymptotically optimal when agents are agnostic of their own abilities. On the
other hand, when agents are self-aware, then we show that there is no signaling
mechanism that can do better than not releasing information, while satisfying
agent participation constraints.
