We propose that defensive forms of identity (i.e., nationalism and national narcissism) can harm the nation through a tendency to maximize the difference between own and other groups in resource allocation. We test this hypothesis by adopting a classic social psychological paradigm, the Tajfel’s matrices, to real-life scenarios designed in the COVID-19 context. We captured maximizing the difference as a preference for one’s nation being allocated more medical resources relative to other countries, but at the expense of absolute ingroup profit. In Studies 1 and 2, defensiveness in national identity predicted this counterproductive strategy that ultimately benefits neither ingroup nor outgroup. In experimental Study 3, inducing ingroup disadvantage led to a greater tendency to maximize the difference. The results provide evidence that defensive national identity might be liked to support for policies that offer a positive intergroup comparison, but simultaneously harm one’s own ingroup.