Demand response design based on a Stackelberg game in smart grid

The future power grid will incorporate the information and communications technology (ICT), that is, smart grid. With help of a two-way communication infrastructure, a real-time demand response can be applied. A smart grid network consisting of one retailer and many customers is considered. The retailer broadcasts the electricity price information. Then, the customers consume electricity to maximize their payoffs. This paper designs a Stackelberg game and derives the solution of the game, i.e., a Stackelberg equilibrium.