Application of incentive based scoring rule deciding pricing for smart houses

This paper presents a smart pricing scheme for smart house facilitating a scoring rule operated reward based pricing mechanism. In this scheme, provider (EP) monitors the network load and propose a day-ahead pricing to the consumers. The consumers respond that pricing by providing a probabilistic device schedule prediction for the smart devices to the lower period. The EP incentivizes the consumers by offering rewards (or discount) over the price depending on the accuracy margin of truthfulness of shifting-period forecast. Such reward function is formed based on a Continuous Ranked Probability Score (CRPS). CRPS has the ability to be a strictly proper scoring rule as well as to assess the closeness of estimation. Finally an optimization problem is formed which reduces EPs costs of providing rewards and satisfying consumers demand. The simulation results will show the effectiveness of the proposed method.