Opportunistic Discrimination ∗

Are minorities more vulnerable to opportunism? We find that individuals from a minority group face greater danger of being cheated by an opportunistic firm because trade with the group is less frequent and the value of a reputation for fairness toward the group is correspondingly smaller. If the majority is sufficiently large it can only lose from a solidarity strategy of punishing opportunism against the minority, so business as usual with the majority can continue even after the minority is cheated. The prediction that smaller groups are more susceptible to discrimination distinguishes the model from most other discrimination models. JEL Classification Categories: J71, J24, D63, L14.