THIS APPENDIX is here to give you a little more background on the basic solution concepts and techniques used in game theory. A warning: This is only a brief overview, and it is somewhat terse. To delve into these concepts at a more satisfying level, I recommend several books that can serve as excellent introductions to game theory at the end of this section.

A game consists of two or more players, and often we index the players by a number or letter (e.g., 1, 2, 3, …, n), where n represents the number of players in a game. Each player in a game has a set of strategies. For example, in a game of peasant farmers we might represent the set of strategies available to Player 1 and Player 2 as S1 = S2 = {Beans; Coffee} in a two-player, two-strategy game where the players have the same strategies. Any combination of strategies, one by each player in the game is called a “strategy profile.” Here, each player i chooses one of the strategies in her strategy set, or chooses one particular strategy si that is part of Si. Thus a strategy profile for n players is a combination of strategies, one by each player, (s1; s2; s3; … sn). The strategy profiles in our two-player, two-strategy game would be (Beans; Beans), (Beans; Coffee), (Coffee; Beans) or (Coffee; Coffee).