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This paper examines the effect of intergroup competition on intragroup cooperation. Three experiments are reviewed. The first experiment establishes that intergroup competition can effectively increase intragroup cooperation in a laboratory setting where symmetric players make binary decisions in one‐shot dilemma games. The second experiment shows that this constructive effect of intergroup competition is generalizable to a real‐life setting in which asymmetric players make continuous decisions in an ongoing interaction. The third experiment demonstrates that the increase in intragroup cooperation can be accounted for at least in part by motivational, rather than structural, effects of the intergroup competition. Theoretical and practical issues concerning the applications of these findings are discussed.

Companies incur immense losses due to employee neglect to save and back up data and failure to frequently update anti‐virus protections. This problem appears perplexing as such oversights are clearly neither in the organization’s nor in the employees’ best interest. We review the possible reasons for this phenomenon arising from studies of social dilemmas, unrealistic optimism, and reinforcement learning. We follow with three examples of “under‐saving” behavior. The results reveal that in all three cases computer users, novices and experts, feel that they do not save enough. This feeling is consistent with the reinforcement learning account. People think that they are less careful than they wish to be. The implications of this observation are discussed.