4. (10 points) Consider the following game. Player 1, the Injurer, might cause a loss of 5 to Player 2, the Victim. The loss can be avoided only if both players exert some care. E.g., the Injurer can be a driver, the Victim a pedestrian, and an accident can be avoided only if they are both careful. For both players, the strategies are "Being Careful" (C) or "Not" (N). Everybody starts from a payoff of 0, and choosing C has a cost of 1. Unless both choose C, the Victim suffers a loss of 5. (a) Solve the game using the most appropriate solution concept. Is the equilibrium socially desirable? (b) Show that the situation can be improved if the government imposes a fine on the Injurer whenever he is not being careful. How large should the fine be? Will the fine be paid in equilibrium? (c) Suppose the government does not see what the Injurer does, only whether there has been an accident, so it is not possible to fine the Injurer for not being careful. Can the situation in (a) be improved by imposing a fine on the Injurer whenever there is an accident? How does this solution differ from (b)? (d) Suppose we're in situation (c), and the government wants to compensate the victim. Instead of the fine going to the government, it will now go to the victim. What happens in this case? How much should the fine be