Social competition is a fundamental mechanism of evolution and plays a central role in structuring individual interactions and communities. Little is known about the factors that affect individuals' competitive success, particularly in humans. Key factors might include stress, a major evolutionary pressure that can affect the establishment of social hierarchies in animals, and individuals' trait anxiety, which largely determines susceptibility to stress and constitutes an important determinant of differences in competitive outcomes. Using an economic-choice experiment to assess competitive self-confidence in 229 human subjects we found that, whereas competitive self-confidence is unaffected by an individual's anxiety level in control conditions, exposure to the Trier social stress test for groups drives the behavior of individuals apart: low-anxiety individuals become overconfident, and high-anxiety individuals become underconfident. Cortisol responses to stress were found to relate to self-confidence, with the direction of the effects depending on trait anxiety. Our findings identify stress as a major regulator of individuals' competitiveness, affecting self-confidence in opposite directions in high and low anxious individuals. Therefore, our findings imply that stress may provide a new channel for generating social and economic inequality and, thus, not only be a consequence, but also a cause of inequality through its impact on competitive self-confidence and decision making in financially-relevant situations.