Mental accounting theory‐based bounded‐rationality trading strategy of prosumers in transactive energy market

Abstract

In the transactive energy market (TEM), prosumers are assumed to be rational. However, prosumers' trading behaviours are affected by many factors (e.g. social relations, personal preferences, and habits). Their trading demands vary in benefits, comfort levels, and environmental consciousness, which show bounded rationality. Accordingly, this paper introduces the mental accounting theory to develop a trading decision-making method by characterizing prosumers' actual trading behaviours. It quantified prosumers' motivations and psychological changes by the risk attitude and subjective value models in the process of multi-account management. The updating rules of trading decisions and multi-round bidding market mechanism are also designed to improve the social welfare and market efficiency. Case studies demonstrate that the proposed method can make prosumers trade in TEM under their actual intentions and bounded-rationality. And the market mechanism can help to increase social welfare and market efficiency.

Integrated Planning and Operation Dispatching of Source–Grid–Load–Storage in a New Power System: A Coupled Socio–Cyber–Physical Perspective

“…Their trading demands also vary in terms of benefits, comfort level, and environmental awareness. Therefore, when describing actual transaction behaviors, it is important to consider consumers' risk attitudes and subjective values and quantitatively analyze consumers' actual intentions and psychological factors [143]. Appropriate transaction decision-making methods are constructed to attract consumers to actively participate in market transactions, aiming to improve market efficiency and power system stability.…”