The DSM Optimal Incentive Mechanism Based on Principal-Agent Theory

@article{Zhang2008TheDO,
  title={The DSM Optimal Incentive Mechanism Based on Principal-Agent Theory},
  author={Yan-fu Zhang and Hong-qing Zhang and Lin Liu},
  journal={2008 4th International Conference on Wireless Communications, Networking and Mobile Computing},
  year={2008},
  pages={1-4}
}
The main approach for promoting grid companies to implement Demand Side Management (DSM) is to establish effective DSM incentive mechanisms. This paper builds expected utility functions for the regulatory agency and the grid companies from the point of principal-agent theory, calculates the utility functions under different regulatory approach, and the results show that Shared Savings Incentive Mechanism can achieve regulatory agency's objectives and make grid companies' benefit maximization at… CONTINUE READING