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Like other group-living species, humans often cooperate more with an in-group member than with out-group members and strangers. Greater in-group favoritism should imply that people also compete less with in-group members than with out-group members and strangers. However, in situations where people could invest to take other's resources and invest to protect against exploitation, we observed the opposite. Akin to what in other species is known as the "nasty neighbor effect," people invested more when facing an in-group rather than out-group member or stranger across 51 nations, in different communities in Kenya, and in representative samples from the United Kingdom. This "nasty neighbor" behavior is independent of in-group favoritism in trust and emerges when people perceive within-group resource scarcity. We discuss how to reconcile that humans exhibit nastiness and favoritism toward in-group members with existing theory on in-group favoritism. [ABSTRACT FROM AUTHOR]