Game Theory: It is a mathematical attempt at a formal understanding of outcomes (formally known as ‘equilibria’) that emerge from actions taken and strategies made by interacting agents, based on information or assumptions about expected payoffs from each (joint) action. It is, thus, a study of strategic interaction between players that offers not only an understanding of human behavior, but also provides insights on the reasoning processes that lead to such behavior. Accordingly, a game is a situation characterized by the identification of the interacting players, the actions and strategies available to them, and the payoffs that are associated with each combination of strategies simultaneously chosen by all players.

Players: The decision-makers involved in a game. The term “players” in game theory is often broadly defined to include economic agents, that is, individuals, households, firms, regulatory authorities, nations,...