Resource title

Cross-racial envy and underinvestment in South Africa

Resource image

image for OpenScout resource :: Cross-racial envy and underinvestment in South Africa

Resource description

Trust games are employed to investigate the effect of heterogeneity in income and race on cooperation in South Africa. The amount of socio-economic information available to the subjects about their counterparts is varied. No significant behavioural differences are observed, when no such information is provided. However, when the information is available, it significantly affects individual trust behaviour. The low income subjects from both racial groups invest significantly less in partnerships with the high income subjects of the other racial group than in any other partnership. We attribute this behaviour to cross-racial envy, which on aggregate may lead to substantial underinvestment in the economy.

Resource author

Daniel Haile, Abdolkarim Sadrieh, Harrie A. A. Verbon

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/19121

Resource license

Adapt according to the presented license agreement and reference the original author.