Migrations have intensified with the advent of globalisation. Societies once solidly monocultural are becoming increasingly multicultural. It is, however, not clear how social capital would travel across cultural boundaries. A multicultural environment might result on agents preferring to interact with those of their own culture, discriminating against others. We study trust, an aspect of social capital, between domestic Australian students of non-Asian origin and international students of Asian origin. To measure the degree of trust and patterns of discrimination between these groups, the Berg et al. (1995) trust game and a series of control games were used in framework where each participant played each game against several partners knowing their domestic or international status. Controlling for individual heterogeneity, domestic students significantly discriminated against international students in the trust game, and individual discrimination was taste-based rather than based on beliefs towards international students’ trustworthiness. Moreover, the average amount that international students sent in the trust game was negatively related with the number of semesters studied at university in Australia, which may partly reflect cultural adjustment but also institutional disadvantages faced specifically by international students. The study furthers understanding of the patterns of discrimination between domestic and international university students and the nature of this discrimination.
