Is a term used in game theory to illustrate players' preferences over the outcomes available to them in the game. Payoffs normally represent the utility to consumers or profit to businesses of playing a particular action in the game. Clearly players wish to maximise this payoff to meet their objectives of profit or utility maximisation.
Below is a payoff matix to illustrate the breakdown of supermarkets payoffs corresponding to pricing decisions in terms of the profit they will receive.
