Working Paper

2015-05-28

CSSR and SALDRU

University of Cape Town

I examine the impact of racial identity on behavior in trust games played by White, Black and Colored high school students in South Africa. There is a systematic pattern of distrust towards Black partners, even by Black proposers, partially attributable to mistaken expectations. White proposers are significantly less likely to engage in a strategic interaction at all when paired with a Black partner, while Colored and Black proposers engage in exchange but at lower levels than when paired with nonBlacks. However, greater racial diversity in schools and friendship groups is positively and significaantly associated with greater trust towards Black partners.

Many thanks to Sam Bowles, Michael Ash, Gene Fisher, Malcolm Keswell, Catherine Eckel, Jeff Carpenter, Glenn Harrison, Abigail Barr, Iris Bohnet, and Geert Dhaene for their valuable comments and useful insights on earlier drafts. I must thank the Western Cape Education Department for authorising this project, all the school principals who so graciously allowed us into their schools on three separate occasions, and for the teachers who volunteered to help us with logistical support. I am also grateful to Prof. Rob Sieborger from the School of Education at the University of Cape Town, who was instrumental in helping me set up many of the school visits, and to my wonderful team of research assistants, headed by Chris Raubenheimer, for their help in running the sessions. This work was generously supported by the MacArthur Network on Norms and Preferences, The National Research Foundation (NRF) of South Africa, the African Economic Research Consortium (AERC), and the Santa Fe Institute.