Which hat to wear? Impact of natural identities on coordination and cooperation

•We prime participants' natural identities in the laboratory.•Ethnic identity priming leads to less efficient coordination.•School identity priming leads to more joint payoff-maximizing play.

As the workforce becomes increasingly diverse, motivating individuals from different backgrounds to work together effectively is a major challenge facing organizations. In an experiment conducted at a large public university in the United States, we manipulate the salience of participants' multidimensional natural identities and investigate the effects of identity on coordination and cooperation in a series of minimum-effort and prisoner's dilemma games. By priming a fragmenting (ethnic) identity, we find that, compared to the control, participants are significantly less likely to choose high effort in the minimum-effort games, leading to less efficient coordination. In comparison, priming a common organization (school) identity significantly increases the choice of a rational joint payoff maximizing strategy in a prisoner's dilemma game.