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In this paper we investigate a dynamic pricing model for constant demand elasticity where customers have a probability distribution on the number of items they order. This is a generalization from standard models which restrict customers to…

Optimization and Control · Mathematics 2018-03-01 Nyles Breecher , Richard Stockbridge

Demand Response is an emerging technology which will transform the power grid of tomorrow. It is revolutionary, not only because it will enable peak load shaving and will add resources to manage large distribution systems, but mainly…

Information Theory · Computer Science 2012-09-26 Vicenç Gómez , Michael Chertkov , Scott Backhaus , Hilbert J. Kappen

The dynamic pricing of electricity is one of the most crucial demand response (DR) strategies in smart grid, where the utility company typically adjust electricity prices to influence user electricity demand. This paper models the…

Optimization and Control · Mathematics 2024-07-16 Jiangjiang Cheng , Ge Chen , Zhouming Wu , Yifen Mu

The energy transition is expected to significantly increase the share of renewable energy sources whose production is intermittent in the electricity mix. Apart from key benefits, this development has the major drawback of generating a…

Trading and Market Microstructure · Quantitative Finance 2023-01-30 Thibaut Théate , Antonio Sutera , Damien Ernst

This paper is concerned with the determination of pricing strategies for a firm that in each period of a finite horizon receives replenishment quantities of a single product which it sells in two markets, e.g., a long-distance market and an…

Optimization and Control · Mathematics 2015-09-25 Wen , Chen , Adam Fleischhacker , Michael N. Katehakis

In societal-scale infrastructures, such as electric grids or transportation networks, pricing mechanisms are often used as a way to shape users' demand in order to lower operating costs and improve reliability. Existing approaches to…

Systems and Control · Electrical Eng. & Systems 2023-08-01 Spencer Hutchinson , Berkay Turan , Mahnoosh Alizadeh

Dynamic pricing in retail requires policies that adapt to shifting demand while coordinating decisions across related products. We present a systematic empirical study of multi-agent reinforcement learning for retail price optimization,…

Artificial Intelligence · Computer Science 2025-11-04 Krishna Kumar Neelakanta Pillai Santha Kumari Amma

In this paper, we demonstrate that a consumer's marginal system impact is only determined by their demand profile rather than their demand level. Demand profile clustering is identical to cluster consumers according to their marginal…

Economics · Quantitative Finance 2017-01-11 Yang Yu , Guangyi Liu , Wendong Zhu , Fei Wang , Bin Shu , Kai Zhang , Ram Rajagopal , Nicolas Astier

The present study proposes clustering techniques for designing demand response (DR) programs for commercial and residential prosumers. The goal is to alter the consumption behavior of the prosumers within a distributed energy community in…

Traditional pricing paradigms, once dominated by static models and rule-based heuristics, are increasingly being replaced by dynamic, data-driven approaches powered by machine learning algorithms. Despite their growing sophistication, most…

Machine Learning · Computer Science 2025-12-01 Marco Mussi , Marcello Restelli

Price elasticity model (PEM) is an appealing and modest model for assessing the potential of flexible demand in DR. It measures the customers demand sensitivity through elasticity in relation to price variation. However, application of PEM…

Systems and Control · Electrical Eng. & Systems 2021-06-01 Vipin Chandra Pandey , Nikhil Gupta , K. R. Niazi , Anil Swarnkar , Rayees Ahmad Thokar

The increasing share of volatile renewable electricity production motivates demand response. Substantial potential for demand response is offered by flexible processes and their local multi-energy supply systems. Simultaneous optimization…

Optimization and Control · Mathematics 2024-01-10 Florian Joseph Baader , Philipp Althaus , André Bardow , Manuel Dahmen

Under Smart Grid environment, the consumers may respond to incentive--based smart energy tariffs for a particular consumption pattern. Demand Response (DR) is a portfolio of signaling schemes from the utility to the consumers for load…

Signal Processing · Electrical Eng. & Systems 2019-05-28 Shashank Singh , Aryesh Namboodiri , M. P. Selvan

Demand response (DR) leverages demand-side flexibility, offering a promising approach to enhance market conditions like mitigating wholesale price spikes. However, poorly chosen DR locations can inadvertently increase electricity prices.…

Systems and Control · Electrical Eng. & Systems 2024-08-06 Yufan Zhang , Honglin Wen , Tao Feng , Yize Chen

Dynamic pricing is crucial in sectors like e-commerce and transportation, balancing exploration of demand patterns and exploitation of pricing strategies. Existing methods often require precise knowledge of the demand function, e.g., the…

Machine Learning · Computer Science 2025-03-04 Xueping Gong , Jiheng Zhang

The evolution of the power grid towards the so-called Smart Grid, where information technologies help improve the efficiency of electricity production, distribution and consumption, allows to use the fine-grained control brought by the…

Optimization and Control · Mathematics 2017-05-03 Nguyen Hoang Son Duong , Patrick Maillé , Ashish Kumar , Laurent Toutain

With the rapidly increased penetration of renewable generations, incentive-based demand side management (DSM) shows great value on alleviating the uncertainty and providing flexibility for microgrid. However, how to price those demand…

Optimization and Control · Mathematics 2019-08-06 Zhaohao Ding , Feng Zhu , Yajing Wang , Ying Lu , Lizi Zhang

Demand response (DR) is a cost-effective and environmentally friendly approach for mitigating the uncertainties in renewable energy integration by taking advantage of the flexibility of customers' demands. However, existing DR programs…

Optimization and Control · Mathematics 2017-05-11 Joshua Comden , Zhenhua Liu , Yue Zhao

Nowadays the emerging smart grid technology opens up the possibility of two-way communication between customers and energy utilities. Demand Response Management (DRM) offers the promise of saving money for commercial customers and…

Systems and Control · Electrical Eng. & Systems 2022-03-07 Hossein Mohammadi Rouzbahani , Abolfazl Rahimnezhad , Hadis Karimipour

This paper explores the application of a reinforcement learning (RL) framework using the Q-Learning algorithm to enhance dynamic pricing strategies in the retail sector. Unlike traditional pricing methods, which often rely on static demand…

Machine Learning · Computer Science 2024-11-28 Mohit Apte , Ketan Kale , Pranav Datar , Pratiksha Deshmukh