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Context frames such as describing a Prisoner’s Dilemma as a “community” or a “stock exchange” game cause significant variation in cooperative behaviour. Here, we draw on recent advances in research on situation construal to propose that perceived conflict of interests is a mechanism underlying framing effects on cooperation in experimental games. Specifically, we argue that people readily think about situations in terms of conflicts of interests, and how people perceive the conflict of interests in different games predicts differences in cooperation across these games. In a formal model, we show that variation in perceived conflict of interests can affect cooperative decisions even when first-order beliefs and social preferences are static. By eliciting both situation perceptions and beliefs about others’ behaviour in a framed game, we test the proposed perceptual mechanism and compare it against existing mechanistic explanations based on frame-dependent beliefs and preferences. As such, this study has the potential to integrate framing effects with the wider literature on situation perception to advance a better understanding of framing effects on social decision-making.