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Modeling consumer opinions towards dynamic pricing: An agent-based approach

Listed author(s):
  • Anna Kowalska-Pyzalska
  • Katarzyna Maciejowska
  • Katarzyna Sznajd-Weron
  • Rafal Weron

Using an agent-based modeling approach we show how personal attributes, like conformity or indifference, impact opinions of individual electricity consumers regarding innovative dynamic tariff programs. We also examine the influence of advertising, discomfort of usage and the expectations of financial savings on opinion dynamics. Our main finding is that currently the adoption, understood as a positive opinion or attitude toward the innovation, of dynamic electricity tariffs is virtually impossible due to the high level of indifference in today’s societies. However, if in the future the indifference level is reduced, e.g., through educational programs that would make the customers more engaged in the topic, factors like tariff pricing schemes and intensity of advertising will became the focal point.

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File URL: http://www.im.pwr.wroc.pl/~hugo/RePEc/wuu/wpaper/HSC_14_06.pdf
File Function: Original version, 2014
Download Restriction: no

Paper provided by Hugo Steinhaus Center, Wroclaw University of Technology in its series HSC Research Reports with number HSC/14/06.

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Length: 7 pages
Date of creation: 30 Apr 2014
Publication status: Published as A. Kowalska-Pyzalska, K. Maciejowska, K. Sznajd-Weron, R.Weron (2014) Modeling consumer opinions towards dynamic pricing: An agent-based approach, IEEE Conference Proceedings, 11th International Conference on the European Energy Market (EEM'14), DOI 10.1109/EEM.2014.6861272.
Handle: RePEc:wuu:wpaper:hsc1406
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  1. Katarzyna Sznajd-Weron & Józef Sznajd, 2000. "Opinion Evolution In Closed Community," International Journal of Modern Physics C (IJMPC), World Scientific Publishing Co. Pte. Ltd., vol. 11(06), pages 1157-1165.
  2. Ian Ayres & Sophie Raseman & Alice Shih, 2013. "Evidence from Two Large Field Experiments that Peer Comparison Feedback Can Reduce Residential Energy Usage," Journal of Law, Economics and Organization, Oxford University Press, vol. 29(5), pages 992-1022, October.
  3. Thorsnes, Paul & Williams, John & Lawson, Rob, 2012. "Consumer responses to time varying prices for electricity," Energy Policy, Elsevier, vol. 49(C), pages 552-561.
  4. Frank M. Bass, 1969. "A New Product Growth for Model Consumer Durables," Management Science, INFORMS, vol. 15(5), pages 215-227, January.
  5. Strbac, Goran, 2008. "Demand side management: Benefits and challenges," Energy Policy, Elsevier, vol. 36(12), pages 4419-4426, December.
  6. Zugno, Marco & Morales, Juan Miguel & Pinson, Pierre & Madsen, Henrik, 2013. "A bilevel model for electricity retailers' participation in a demand response market environment," Energy Economics, Elsevier, vol. 36(C), pages 182-197.
  7. Allcott, Hunt, 2011. "Social norms and energy conservation," Journal of Public Economics, Elsevier, vol. 95(9-10), pages 1082-1095, October.
  8. Sznajd-Weron, K. & Weron, R., 2003. "How effective is advertising in duopoly markets?," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 324(1), pages 437-444.
  9. Ian Ayres & Sophie Raseman & Alice Shih, 2009. "Evidence from Two Large Field Experiments that Peer Comparison Feedback Can Reduce Residential Energy Usage," NBER Working Papers 15386, National Bureau of Economic Research, Inc.
  10. Allcott, Hunt, 2011. "Social norms and energy conservation," Journal of Public Economics, Elsevier, vol. 95(9), pages 1082-1095.
  11. Kowalska-Pyzalska, Anna & Maciejowska, Katarzyna & Suszczyński, Karol & Sznajd-Weron, Katarzyna & Weron, Rafał, 2014. "Turning green: Agent-based modeling of the adoption of dynamic electricity tariffs," Energy Policy, Elsevier, vol. 72(C), pages 164-174.
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