Assessment of Electricity Demand Price Elasticity Based on Stackelberg Game

Accurate assessment of electricity demand price elasticity holds paramount significance for analyzing user price responsiveness and implementing price-based demand response. This paper adopts a perspective focused on the retail electricity market and introduces a methodology for assessing electricity demand price elasticity through the stackelberg game between electricity retail company and consumers. Firstly, considering the conflicting interests and disparate decision-making positions of electricity retail company and consumers, a stackelberg game model is formulated with the goal of maximizing the utility of both parties. Secondly, an iterative interaction process is employed to compute the time-of-use pricing strategies for electricity retail company and the electricity consumption behavior strategies for consumers. During each iteration of the game, the electricity demand price elasticity of consumers is updated. The process continues until a Nash equilibrium is reached, ultimately enabling the assessment of consumers’ electricity demand price elasticity. Finally, the proposed model and methodology are validated through numerical examples to demonstrate their rationality and effectiveness.