Preference Analyses of Residential Appliances in Demand Response: A Novel Perspective Based on Behavioral Economics

Abstract

Although considerable of literature on residential demand response strategy takes user satisfaction into account, we argue that those researches cannot accurately reflect user satisfaction because they do not theoretically analyze the user's decision-making process from a cost-benefit perspective. In order to precisely characterize the user satisfaction of electricity consumption, this paper proposes a utility function (in an economic sense)-based approach for sophisticatedly formulating user satisfaction. Additionally, behavioral economics is introduced to describe user's decision-making process in demand response, and a washer dryer and a PEV are taken as examples. Since the proposed method can provide a theoretically practical analytical framework which indeed and elaborately takes human factors into consideration, user enthusiasm for demand response can be ensured and the effectiveness of the demand response strategy can be more easily realized.