Peyton has a dog whose loud barking upsets their neighbour Avery. Assume that the benefit Peyton gets from the dog is $400 and that Avery incurs a cost of $500 from the barking. If Peyton has the legal right to own the dog what is a private solution?

1)Avery pays Peyton $600 to give the dog away. 2)Avery pays Peyton $490 to give the dog away. 3)Peyton pays Avery $500 to compensate for their dog's parking. 4)A private solution that improves this scenario is not possible.