In this paper we propose a model for understanding the under-enrollment of black students in advanced courses that demonstrates how group differences in educational investment decisions can arise even in the absence of any group-level differences in underlying incentives or behavioral propensities. In our model, students gain peer group acceptance by spending time with other peer group members. This can occur during both leisure time and class time, provided enough members of their relevant peer group also take the same academic courses. This produces a scenario in which taking advanced courses is a complement to peer group acceptance for some students (those who have enough peer group members taking advanced courses) and a tradeoff for other students (those who do not have enough peer group members in advanced courses). Structural and historical forces, such as racialized tracking, that contribute to an initial condition of fewer black students in advanced courses can create an environment where black students are more likely to be isolated from other members of their racial group, relative to white students. Our model is distinct from theories like the “acting white” hypothesis that assume a cultural or non-cognitive skill deficit on the part of black students. The results from this model arise not because black students respond to incentives differently, but because they face a different set of initial conditions, most likely as the result of institutional barriers.