For my own class, I think I would go with a combination of group average and individual mark. Maintaining a shared group mark might encourage them to work together more and to focus on teamwork. The individual mark would keep them on task and provide motivation to students to maintain their own level of adequate participation, without having them feel they can rely on others to get them through.
Further though, I would ask for an Individual mark/report to be completed by each student as it would act as further motivation within the group itself for everyone to participate equally, and to ensure that the instructor perceived individual participation accurately.
Winchester-Seeto, T. (April, 2002). Assessment of collaborative work - collaboration versus assessment. Invited paper presented at the Annual Uniserve Science Symposium, The University of Sydney, 5th April.