Suppose that the IRS is deciding whether to audit (A) a taxpayer or ignore (I) them. The individual can choose to hide (H) a portion of their income or truthfully report (R) all of it. The IRS knows that the individual can be a skilled evader (S) with 0.5 probability or an unskilled evader (U) with 0.5 probability. Since auditing costs the IRS money, it is not as worth the effort to audit unskilled evaders as, conditional on evading, they do not evade much. If the individual is type S, then the following payoffs are received: IRS A I Taxpayer H -2,2 4,0 R 2,-2 2,0 But if the individual of type U, instead the following payoffs are received: IRS A I Taxpayer H -2,1 2,0 R 2,-2 2,0 a. Draw the extensive form of this game. b. Find the pure Bayesian Nash Equilbria of this game. c. Which of these BNE are WPBE and for what beliefs? 1