A Behavioral Economics Approach to Residential Electricity Consumption

Luciano C. Siebert, Adriana Sbicca, Alexandre Rasi Aoki and Germano Lambert-Torres
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Luciano C. Siebert: Department of Electricity and Materials, Lactec Institutes, Curitiba 81530-180, Brazil
Adriana Sbicca: Department of Economics, Federal University of Parana, Curitiba 80210-170, Brazil
Alexandre Rasi Aoki: Department of Electricity and Materials, Lactec Institutes, Curitiba 81530-180, Brazil
Germano Lambert-Torres: Gnarus Institute, Itajuba 37500-052, Brazil
Authors registered in the RePEc Author Service: Adriana Sbicca Fernandes

Energies, 2017, vol. 10, issue 6, 1-18

Abstract: Consumer behavior is complex and is difficult to represent in traditional economic theories of decision-making. This paper focuses on the development of an agent-based approach to analyze people’s behavior in consuming electricity using a behavioral economics framework, where the consumer is the main agent of power systems. This approach may bring useful insights for distribution companies and regulatory agencies, helping to shift thinking to a more user-centric approach. The emergent properties of electricity consumption are modeled by the means of consumer’s heuristics, taking into account the electricity price, consumer’s satisfaction level, willingness to invest in new technologies, social interactions, and marketing strategies by the power utility. Analysis on the emergent behavior of this approach through simulation studies showed that it is indeed valuable, as does not require in-depth data of all details on human behavior. However, it contributes to the understanding of relations among various objects involved in electricity consumption.

Keywords: agent-based modeling; complex systems; consumer behavior; economics; demand-side management; smart grids (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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