Society wants to make bank-robberies impossible. Which of the following statements is incorrect?

1. A legally binding contract between robbers resolves the missing market between robbers, but leaves the market for trades between the robbers and their victims missing
2. Bank-robberies can be part of a Pareto efficient equilibrium; hence, this is not a Pareto improvement
3. Legally binding contracts between robbers are morally unacceptable and are therefore Pareto inefficient
4. Robbery and theft impose an externality of the robber on the victim