The modernization of the power system introduces technologies that may
improve the system's efficiency by enhancing the capabilities of users. Despite
their potential benefits, such technologies can have a negative impact. This
subject has widely analyzed, mostly considering for-profit electric utilities.
However, the literature has a gap regarding the impact of new technologies on
non-profit utilities.
In this work, we quantify the price of anarchy of non-profit utilities, that
is, the cost caused by lack of coordination of users. We find that users, in
the worst case, can consume up to twice the optimal demand, obtaining a small
fraction of the optimal surplus. For this reason, we leverage the theory of
mechanism design to design an incentive scheme that reduces the inefficiencies
of the system, which preserves the privacy of users. We illustrate with
simulations the efficiency loss of the system and show two instances of
incentive mechanism that satisfy either budget balance and budget deficit.
Description
Incentive Mechanisms to Prevent Efficiency Loss of Non-Profit Utilities
%0 Journal Article
%1 barreto2019incentive
%A Barreto, Carlos
%A Mojica-Nava, Eduardo
%A Quijano, Nicanor
%D 2019
%J CoRR
%K Incentive Mechanisms
%R 10.1016/j.ijepes.2019.03.018
%T Incentive Mechanisms to Prevent Efficiency Loss of Non-Profit Utilities
%U http://arxiv.org/abs/1906.11372
%X The modernization of the power system introduces technologies that may
improve the system's efficiency by enhancing the capabilities of users. Despite
their potential benefits, such technologies can have a negative impact. This
subject has widely analyzed, mostly considering for-profit electric utilities.
However, the literature has a gap regarding the impact of new technologies on
non-profit utilities.
In this work, we quantify the price of anarchy of non-profit utilities, that
is, the cost caused by lack of coordination of users. We find that users, in
the worst case, can consume up to twice the optimal demand, obtaining a small
fraction of the optimal surplus. For this reason, we leverage the theory of
mechanism design to design an incentive scheme that reduces the inefficiencies
of the system, which preserves the privacy of users. We illustrate with
simulations the efficiency loss of the system and show two instances of
incentive mechanism that satisfy either budget balance and budget deficit.
@article{barreto2019incentive,
abstract = {The modernization of the power system introduces technologies that may
improve the system's efficiency by enhancing the capabilities of users. Despite
their potential benefits, such technologies can have a negative impact. This
subject has widely analyzed, mostly considering for-profit electric utilities.
However, the literature has a gap regarding the impact of new technologies on
non-profit utilities.
In this work, we quantify the price of anarchy of non-profit utilities, that
is, the cost caused by lack of coordination of users. We find that users, in
the worst case, can consume up to twice the optimal demand, obtaining a small
fraction of the optimal surplus. For this reason, we leverage the theory of
mechanism design to design an incentive scheme that reduces the inefficiencies
of the system, which preserves the privacy of users. We illustrate with
simulations the efficiency loss of the system and show two instances of
incentive mechanism that satisfy either budget balance and budget deficit.},
added-at = {2019-07-08T04:23:58.000+0200},
author = {Barreto, Carlos and Mojica-Nava, Eduardo and Quijano, Nicanor},
biburl = {https://www.bibsonomy.org/bibtex/2e89116911e59e5bbc9b00be1a8db5367/tzq2doc},
description = {Incentive Mechanisms to Prevent Efficiency Loss of Non-Profit Utilities},
doi = {10.1016/j.ijepes.2019.03.018},
interhash = {dcea8f1f058b222cf9c27af2e1831949},
intrahash = {e89116911e59e5bbc9b00be1a8db5367},
journal = {CoRR},
keywords = {Incentive Mechanisms},
note = {cite arxiv:1906.11372Comment: 17 pages, 3 figures, accepted in the International Journal of Electrical Power and Energy Systems},
timestamp = {2019-07-08T04:23:58.000+0200},
title = {Incentive Mechanisms to Prevent Efficiency Loss of Non-Profit Utilities},
url = {http://arxiv.org/abs/1906.11372},
year = 2019
}