Let us assume that the situation described at the beginning of this exercise is modified in order to take into account a moral hazard dimension. Now, the revenue of the agent is given by lottery L, if the agent exerts a high level of effort. If the agent exerts a low level of effort, its revenue is given by the sum of two parts: the first part is a lottery Lo = ({0,4}; {1/2,1/2}), and the second part is a constant private benefit B = 1/2. We assume that the insurance company cannot observe the effort exerted by the agent. We still consider that the insurance company offers a contract {to, ta} to the agent. 6. Write down the individual rationality constraint the states that the agent is better off accepting the insurance contract and choosing a high effort level rather than refusing the contract. Let us assume that the situation described at the beginning of this exercise is modified in order to take into account a moral hazard dimension. Now, the revenue of the agent is given by lottery L, if the agent exerts a high level of effort. If the agent exerts a low level of effort, its revenue is given by the sum of two parts: the first part is a lottery Lo = ({0,4}; {1/2,1/2}), and the second part is a constant private benefit B = 1/2. We assume that the insurance company cannot observe the effort exerted by the agent. We still consider that the insurance company offers a contract {to, ta} to the agent. 6. Write down the individual rationality constraint the states that the agent is better off accepting the insurance contract and choosing a high effort level rather than refusing the contract