Abstract
This study uses an online laboratory experiment and a post-experimental survey to test whether the Mastercard Foundation (MCF) scholarship programme causally influences the creation of cognitive social capital among University of Pretoria recipients. Cognitive social capital, which is based on commonly shared norms among subjects, leads to honest and cooperative behaviour. It is necessary for ease of information flow, a reduction in transaction costs, and allowing communities to deal with social dilemmas like common-pool resource management. The study used incentivised economic experiments on randomly selected subjects drawn from a control group (non-MCF students) and a treated group (MCF students). The experimental results from the two groups were compared to check the differences in terms of levels of trust, reciprocity, altruism, cooperation, in-group favouritism and out-group discrimination. Our results show that the scholarship programme has a significant impact only on levels of in-group favouritism and out-group discrimination. The post-experimental survey showed that MCF and non-MCF subjects were similar in terms of stated pro-social behaviour perceptions and in-group social capital creation.