This paper develops and estimates a game-theoretical model of inflation targeting where the central banker's preferences are asymmetric around the targeted rate.

In this paper we will describe a class of three-person games and draw general conclusions about non-cooperative behavior in them.

A contingent contract in a transferable utility game under uncertainty specifies an outcome for each possible state. It is assumed that coalitions evaluate these contracts by considering the minimal possible excesses. A main question of the paper concerns the existence and characterization of...