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Abstract: In colonial Chiloe, Southern Chile, extreme geographical isolation and special historical circumstances helped to generate informal, self-supporting arrangements for peaceful intergroup cooperation (Fearon and Laitin, 1996; Leeson, 2006). Emigration to Chiloe had offered unique opportunities for self re-invention. The elite or encomendero class tended to use marriage choices mostly to start ‘melting-pot’ families, which combined ‘Old Christian’ and ‘New Christian’ surnames. Some were secret descendants of converted Jews, to whom emigration to the New World was forbidden. Rent seeking by ‘melting-pot’ families was particularly successful. These families gained privileged access to Indian labour and state lands. This paper uses econometric analysis of data from sources never used before, to examine whether individuals were aware of ‘New’ / ’Old Christian’ surname differences between groups, how they responded to this awareness, and how the system rewarded or punished their responses.