IDEAS home Printed from https://ideas.repec.org/a/spr/comgts/v22y2025i2d10.1007_s10287-025-00532-7.html

Fairness by design in shared-energy allocation problems

Author

Listed:
  • Zoé Fornier

    (METRON
    ENPC, Institut Polytechnique Paris)

  • Vincent Leclère

    (ENPC, Institut Polytechnique Paris)

  • Pierre Pinson

    (Imperial College London
    Technical University of Denmark
    Halfspace)

Abstract

This paper studies how to aggregate agents with a focus on fairness, in particular in dynamic and stochastic frameworks. We suggest to use both acceptability constraints to ensure that each agent benefits from the aggregation, and aggregation operators that aim to distribute the costs and benefits fairly. Rather than using financial mechanisms to adjust for fairness issues, we focus on various objectives and constraints, within decision problems, that achieve fairness by design. We start from a simple single-period deterministic model and then generalize it to a dynamic and stochastic setting using e.g., stochastic dominance constraints. We illustrate our approach in the context of prosumer aggregation, where some prosumers may not be able to access the electricity market directly, although it would be beneficial to them. Therefore, new companies offer to aggregate them and promise to treat them fairly. This leads to a problem of fair resource allocation.

Suggested Citation

  • Zoé Fornier & Vincent Leclère & Pierre Pinson, 2025. "Fairness by design in shared-energy allocation problems," Computational Management Science, Springer, vol. 22(2), pages 1-40, December.
    • Handle: RePEc:spr:comgts:v:22:y:2025:i:2:d:10.1007_s10287-025-00532-7
    DOI: 10.1007/s10287-025-00532-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10287-025-00532-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10287-025-00532-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Walter J. Gutjahr & Raimund M. Kovacevic & David Wozabal, 2023. "Risk-Averse Bargaining in a Stochastic Optimization Context," Manufacturing & Service Operations Management, INFORMS, vol. 25(1), pages 323-340, January.
    2. Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475.
    3. James Konow, 2003. "Which Is the Fairest One of All? A Positive Analysis of Justice Theories," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1188-1239, December.
    4. Soares, João & Lezama, Fernando & Faia, Ricardo & Limmer, Steffen & Dietrich, Manuel & Rodemann, Tobias & Ramos, Sergio & Vale, Zita, 2024. "Review on fairness in local energy systems," Applied Energy, Elsevier, vol. 374(C).
    5. Xiao, Xiangsheng & Wang, Jianxiao & Lin, Rui & Hill, David J. & Kang, Chongqing, 2020. "Large-scale aggregation of prosumers toward strategic bidding in joint energy and regulation markets," Applied Energy, Elsevier, vol. 271(C).
    6. Conley, John P. & Wilkie, Simon, 1996. "An Extension of the Nash Bargaining Solution to Nonconvex Problems," Games and Economic Behavior, Elsevier, vol. 13(1), pages 26-38, March.
    7. Philippe Artzner & Freddy Delbaen & Jean‐Marc Eber & David Heath, 1999. "Coherent Measures of Risk," Mathematical Finance, Wiley Blackwell, vol. 9(3), pages 203-228, July.
    8. Argyris, Nikolaos & Karsu, Özlem & Yavuz, Mirel, 2022. "Fair resource allocation: Using welfare-based dominance constraints," European Journal of Operational Research, Elsevier, vol. 297(2), pages 560-578.
    9. Eunsung Oh, 2022. "Fair Virtual Energy Storage System Operation for Smart Energy Communities," Sustainability, MDPI, vol. 14(15), pages 1-16, August.
    10. Violet Xinying Chen & J. N. Hooker, 2023. "A guide to formulating fairness in an optimization model," Annals of Operations Research, Springer, vol. 326(1), pages 581-619, July.
    11. Dan A. Iancu & Nikolaos Trichakis, 2014. "Fairness and Efficiency in Multiportfolio Optimization," Operations Research, INFORMS, vol. 62(6), pages 1285-1301, December.
    12. Wang, Jianxiao & Zhong, Haiwang & Wu, Chenye & Du, Ershun & Xia, Qing & Kang, Chongqing, 2019. "Incentivizing distributed energy resource aggregation in energy and capacity markets: An energy sharing scheme and mechanism design," Applied Energy, Elsevier, vol. 252(C), pages 1-1.
    13. Dimitris Bertsimas & Vivek F. Farias & Nikolaos Trichakis, 2011. "The Price of Fairness," Operations Research, INFORMS, vol. 59(1), pages 17-31, February.
    14. Miguel Carrión & Uwe Gotzes & Rüdiger Schultz, 2009. "Risk aversion for an electricity retailer with second-order stochastic dominance constraints," Computational Management Science, Springer, vol. 6(2), pages 233-250, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jinho Cha, 2025. "Dynamic Inverse Optimization under Drift and Shocks: Theory, Regret Bounds, and Applications," Papers 2509.14080, arXiv.org.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xiaoqiang Cai & Daniel Zhuoyu Long & Gen Yu & Lianmin Zhang, 2024. "Multiportfolio Optimization: A Fairness-Aware Target-Oriented Model," Manufacturing & Service Operations Management, INFORMS, vol. 26(3), pages 952-971, May.
    2. Gur, Yonatan & Iancu, Dan & Warnes, Xavier, 2020. "Value Loss in Allocation Systems with Provider Guarantees," Research Papers 3813, Stanford University, Graduate School of Business.
    3. Xiao, Xiangsheng & Wang, JianXiao & Hill, David J., 2022. "Impact of Large-scale concentrated solar power on energy and auxiliary markets," Applied Energy, Elsevier, vol. 318(C).
    4. LAMAS, ALEJANDRO & CHEVALIER, Philippe, 2013. "Jumping the hurdles for collaboration: fairness in operations pooling in the absence of transfer payments," LIDAM Discussion Papers CORE 2013073, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Hussein El Hajj & Douglas R. Bish & Ebru K. Bish, 2021. "Equity in genetic newborn screening," Naval Research Logistics (NRL), John Wiley & Sons, vol. 68(1), pages 44-64, February.
    6. Dynge, Marthe Fogstad & Cali, Umit, 2025. "Distributive energy justice in local electricity markets: Assessing the performance of fairness indicators," Applied Energy, Elsevier, vol. 384(C).
    7. Afzal S. Siddiqui & Sauleh A. Siddiqui, 2022. "Ambiguities and nonmonotonicities under prosumer power," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 30(3), pages 492-532, October.
    8. Yanmeng Tao & Bo Jiang & Qixiu Cheng & Shuaian Wang, 2025. "A Quadratic Programming Model for Fair Resource Allocation," Mathematics, MDPI, vol. 13(16), pages 1-21, August.
    9. Samim Ghamami & Paul Glasserman, 2019. "Submodular Risk Allocation," Management Science, INFORMS, vol. 65(10), pages 4656-4675, October.
    10. Walter J. Gutjahr, 2023. "Fair and efficient vaccine allocation: A generalized Gini index approach," Production and Operations Management, Production and Operations Management Society, vol. 32(12), pages 4114-4134, December.
    11. Liu, Songsong & Papageorgiou, Lazaros G., 2018. "Fair profit distribution in multi-echelon supply chains via transfer prices," Omega, Elsevier, vol. 80(C), pages 77-94.
    12. Yonatan Gur & Dan Iancu & Xavier Warnes, 2021. "Value Loss in Allocation Systems with Provider Guarantees," Management Science, INFORMS, vol. 67(6), pages 3757-3784, June.
    13. Walter J. Gutjahr & Raimund M. Kovacevic & David Wozabal, 2023. "Risk-Averse Bargaining in a Stochastic Optimization Context," Manufacturing & Service Operations Management, INFORMS, vol. 25(1), pages 323-340, January.
    14. Chung-Han Hsieh & Rong Gan, 2025. "Is Noisy Data a Blessing in Disguise? A Distributionally Robust Optimization Perspective," Papers 2509.01076, arXiv.org.
    15. Aziz, Haris & Huang, Xin & Mattei, Nicholas & Segal-Halevi, Erel, 2023. "Computing welfare-Maximizing fair allocations of indivisible goods," European Journal of Operational Research, Elsevier, vol. 307(2), pages 773-784.
    16. MohammadHossein Bateni & Yiwei Chen & Dragos Florin Ciocan & Vahab Mirrokni, 2022. "Fair Resource Allocation in a Volatile Marketplace," Operations Research, INFORMS, vol. 70(1), pages 288-308, January.
    17. Downward, Anthony & Young, David & Zakeri, Golbon, 2016. "Electricity retail contracting under risk-aversion," European Journal of Operational Research, Elsevier, vol. 251(3), pages 846-859.
    18. Shai Vardi & William Haskell, 2025. "The Price of Fairness of Scheduling a Scarce Resource," Operations Research, INFORMS, vol. 73(6), pages 3104-3117, November.
    19. Heras, Jorge & Martín, Mariano, 2020. "Social issues in the energy transition: Effect on the design of the new power system," Applied Energy, Elsevier, vol. 278(C).
    20. Alonso-Ayuso, Antonio & Carvallo, Felipe & Escudero, Laureano F. & Guignard, Monique & Pi, Jiaxing & Puranmalka, Raghav & Weintraub, Andrés, 2014. "Medium range optimization of copper extraction planning under uncertainty in future copper prices," European Journal of Operational Research, Elsevier, vol. 233(3), pages 711-726.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:comgts:v:22:y:2025:i:2:d:10.1007_s10287-025-00532-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.