20 marks) If the student believes that the teacher is biased then it negatively affects his performance. A student has beliefs about the type of teacher. The student thinks that teacher is biased with the probability and unbiased with the probability 1 . (This perception may be the function of the neighborhood where the student stay, for instance, if the neighborhood is dominated by the upper-caste and the concerned student belongs to the lower caste, so in a way, reflects the percentage of people belonging to the upper-class in a neighborhood.) A teacher can take either of the two actions; involves a student in the class or ignore the student. A student has two choices, to put in a high level of effort or a low level of effort. Student's pay-off is increasing if the teacher is inclusive and also in his level of effort. Model this situation, and show that there is an equilibrium where the student puts in less effort because of his beliefs that the teacher is biased