Mechanism Design for Demand Response Programs with financial and non-monetary (social) Incentives

TL;DR

This paper proposes a demand management mechanism that incorporates both monetary and social incentives, validated through multi-agent simulations and opinion dynamics modeling to achieve user cooperation.

Contribution

It introduces a novel mechanism integrating financial and social incentives for demand response, validated via multi-agent simulation and opinion diffusion models.

Findings

Mechanism effectively promotes demand response with mixed incentives.

Simulation results show stable cooperation among users.

Social incentives influence user behavior significantly.

Abstract

Most demand management approaches with non-mandatory policies assume full users' cooperation, which may not be the case given users' beliefs, needs and preferences. In this paper we propose a mechanism for demand management including incentives both with and without money. The mechanism is validated by means of simulation, modeling the consumers as a finite multiagent system which evolves until a stable state, and social incentives diffusion using opinion dynamics.