Load Shifting in the Smart Grid: To Participate or Not?

Yunpeng Wang, Walid Saad, Narayan B. Mandayam, H. Vincent Poor

Research output: Contribution to journalArticlepeer-review

67 Scopus citations


Demand-side management (DSM) has emerged as an important smart grid feature that allows utility companies to maintain desirable grid loads. However, the success of DSM is contingent on active customer participation. Indeed, most existing DSM studies are based on game-theoretic models that assume customers will act rationally and will voluntarily participate in DSM. In contrast, in this paper, the impact of customers' subjective behavior on each other's DSM decisions is explicitly accounted for. In particular, a noncooperative game is formulated between grid customers in which each customer can decide on whether to participate in DSM or not. In this game, customers seek to minimize a cost function that reflects their total payment for electricity. Unlike classical game-theoretic DSM studies, which assume that customers are rational in their decision-making, a novel approach is proposed based on the framework of prospect theory (PT) to explicitly incorporate the impact of customer behavior on DSM decisions. To solve the proposed game under both conventional game theory and PT, a new algorithm based on fictitious play is proposed using which the game will reach an ${\epsilon }$-mixed Nash equilibrium. Simulation results are provided to assess the impact of customer behavior on DSM. In particular, the overall participation level and grid load can depend significantly on the rationality level of the players and their risk aversion tendencies.

Original languageEnglish (US)
Pages (from-to)2604-2614
Number of pages11
JournalIEEE Transactions on Smart Grid
Issue number6
StatePublished - Nov 2016
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • General Computer Science


  • Demand-side management (DSM)
  • game theory
  • prospect theory (PT)
  • smart grid


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