Parochial cooperation in nested intergroup dilemmas is reduced when it harms out-groups

In intergroup settings, humans often contribute to their in-group at a personal cost. Such parochial cooperation benefits the in-group and creates and fuels intergroup conflict when it simultaneously hurts out-groups. Here, we introduce a new game paradigm in which individuals can display universal cooperation (which benefits both in- and out-group) as well as parochial cooperation that does, versus does not hurt the out-group. Using this set-up, we test hypotheses derived from group selection theory, social identity, and bounded generalized reciprocity theory. Across three experiments we find, first, that individuals choose parochial over universal cooperation. Second, there was no evidence for a motive to maximize differences between in- and out-group, which is central to both group selection and social identity theory. However, fitting bounded generalized reciprocity theory, we find that individuals with a prosocial value orientation display parochial cooperation, provided that this does not harm the out-group; individualists, in contrast, display parochialism whether or not nut it hurts the out-group. Our findings were insensitive to cognitive taxation (Experiments 2–3), and emerged even when universal cooperation served social welfare more than parochialism (Experiment 3).