You are a government attorney who the state's licensing bureau is consulting. The bureau processes applications and collects fees in connection with a wide range of licensed activities, from hunting to trucking to haircutting.

There has been a long-standing problem with one sector in particular: car services (companies, often consisting of a single individual, who offer personal transportation). The annual license fee is $1000, but many individuals who operate car services simply do not register or pay the fee. There are three-fold damages when these individuals are caught (that is, they must pay a total of $3000), but in a given year they face only a 10% chance of capture. If they are captured, however, they usually pay twice this amount, $6000, because it can usually be demonstrated that they cheated on their prior year's fee as well. (The statute of limitations precludes levying fines for earlier years.)

It has been proposed that the license bureau follow the lead of many state tax collection agencies and offer an amnesty program. The proposal is that any individual who admits to operating without a license can pay the regular fee of $1000 and be excused both from the penalty (the additional $2000) and be immune from prosecution for the prior year's fee and penalty. Setting up the program would be a modest cost, mainly involving publicizing it widely. Advise the licensing bureau regarding this proposal.

In preparing your advice, be sure that you do each of the following:

Write down the licensing bureau's game tree for the decision on whether to offer the amnesty.

Solve it. Be sure briefly to explain your work in some fashion that will communicate to the licensing bureau how you reached your conclusion.

Briefly (one or two paragraphs) offer additional comments you think appropriate in advising the licensing bureau on its proposed amnesty program.