Integrating notions of coopetition with social information processing theory, we build and test a theoretical model that explains the paradox that arises when prosocial identifying employees work in competitive climates. Sampling 406 subordinates nested within 91 supervisors over two time‐points, we show that the relationship between prosocial identity and interpersonal helping is stronger when competitive climate is low rather than high. We also find that competitive team climate positively relates to instrumental helping motives (i.e., helping others to gain something in return). In addition, instrumental helping motives significantly moderate the linkage between interpersonal helping and job performance as well as the indirect effect of prosocial identity on job performance via interpersonal helping such that the main and indirect effects became weaker as instrumental helping motives increased. Overall, our findings reveal new insights into how prosocial identifiers incorporate information from social cues to strike a balance between cooperation and competition.