Is Real-time Pricing Smart for Consumers?

Anette Boom*, Sebastian Schwenen

*Corresponding author af dette arbejde

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

4 Downloads (Pure)


We examine the effects of real-time pricing on welfare and consumer surplus in electricity markets. We model consumers on real-time pricing who purchase electricity on the wholesale market. A second group of consumers contracts with retailers and pays time-invariant retail prices. Electricity generating firms compete in supply functions. Increasing the number of consumers on real-time pricing increases welfare and consumer surplus of both types of consumers. Yet, risk averse consumers on traditional time-invariant retail prices are always better off. Collectively, our results point to a public good nature of demand response in power markets when consumers are risk averse.
TidsskriftJournal of Regulatory Economics
Udgave nummer2-3
Sider (fra-til)193-213
Antal sider21
StatusUdgivet - dec. 2021

Bibliografisk note

Published online: 09 November 2021.


  • Electricity
  • Real-time pricing
  • Market power
  • Efficiency