Variables and parameters are placeholders for values that can be defined, referenced, and modified in different parts of a YAML file. They can be useful for avoiding repetition, simplifying updates, and customizing outputs. To declare and use variables and parameters in YAML, use an ampersand (&) to assign an anchor (a name) to a value, and an asterisk (*) to reference it later. Additionally, double curly braces ({{ }}) are used to interpolate (insert) a parameter in a value, with a colon (:) assigning a default value to the parameter if it is not provided. To merge two mappings into one, use double angle brackets (<<), and specify the merge strategy (overwrite or append) with an exclamation mark (!). The scope and visibility of variables and parameters depend on where they are defined and used; generally, variables and parameters are visible within the same level of indentation or below, unless they are overridden by another declaration with the same name. To define a global variable or parameter, declare it at the top level of the file; to define a local variable or parameter, declare it within a specific key or value at the same level of indentation or below; to override a global variable or parameter, declare it with the same name at a lower level of indentation or use the overwrite merge strategy (!overwrite); and to append to a global variable or parameter, use the append merge strategy (!append).