3 Consider the following game describing the agency problem between a supervisor and a laborer. Each player has two strategies. The laborer can either work or shirk, and the supervisor can either monitor the laborer or not monitor. If the laborer works, he produces output valued by the supervisor at v, but if he shirks, the value to the supervisor of the laborer’s output is 0. The laborer earns a wage w unless he is caught shirking, in which case the laborer earns 0. Of course, this wage is a cost −w to the supervisor. The laborer experiences disutility from working which reduces his wage by g. Whenever the supervisor monitors the laborer, she incurs a cost h.