# A Stackelberg game for incentive-based demand response in energy markets

arXiv: https://arxiv.org/abs/2204.08730 · HTML: https://mlsanity.com/paper/2204.08730/

## Key facts

- Cited by 2 papers in the map (data through 14 Oct 2026).
- First posted on arXiv 19 Apr 2022.

## Built on by (most cited first, 2 of 2)

- [Designing Optimal Personalized Incentive for Traffic Routing using BIG Hype algorithm](https://mlsanity.com/paper/2304.12004/) (2023)
- [Decentralized and Privacy-Preserving Learning of Approximate Stackelberg Solutions in Energy Trading Games with Demand Response Aggregators](https://mlsanity.com/paper/2304.02086/) (2023)

## Abstract (arXiv)

In modern buildings renewable energy generators and storage devices are spreading, and consequently the role of the users in the power grid is shifting from passive to active. We design a demand response scheme that exploits the prosumers' flexibility to provide ancillary services to the main grid. We propose a hierarchical scheme to coordinate the interactions between the distribution system operator and a community of smart prosumers. The framework inherits characteristics from price-based and incentive-based schemes and it retains the advantages of both. We cast the problem as a Stackelberg game with the prosumers as followers and the distribution system operator as leader. We solve the resulting bilevel optimization program via a KKT reformulation, proving the existence and the convergence to a local Stackelberg equilibrium. Finally, we provide numerical simulations to corroborate our claims on the benefits of the proposed framework.