Signalling for Electricity Demand Response: When is Truth Telling Optimal?

Rene Aid, Anupama Kowli and Ankur A. Kulkarni

Papers from arXiv.org

Abstract: Utilities and transmission system operators (TSO) around the world implement demand response programs for reducing electricity consumption by sending information on the state of balance between supply demand to end-use consumers. We construct a Bayesian persuasion model to analyse such demand response programs. Using a simple model consisting of two time steps for contract signing and invoking, we analyse the relation between the pricing of electricity and the incentives of the TSO to garble information about the true state of the generation. We show that if the electricity is priced at its marginal cost of production, the TSO has no incentive to lie and always tells the truth. On the other hand, we provide conditions where overpricing of electricity leads the TSO to provide no information to the consumer.

Date: 2023-02, Revised 2023-07
New Economics Papers: this item is included in nep-ene and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2302.12770 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2302.12770

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().