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A Reputation-Based Pricing Strategy for Distributed Diverse Entity Systems: Enhancing Market Efficiency Through Real-Time Reputation Updates

Author

Listed:
  • Tong Li

    (School of Computer And Engineering, Northeastern University, Shenyang 110004, China
    State Grid Liaoning Electric Power Research Institute, Shenyang 110142, China)

  • Yuheng Li

    (School of Information Science and Engineering, Northeastern University, Shenyang 110004, China)

  • Junpeng Gao

    (School of Information Science and Engineering, Northeastern University, Shenyang 110004, China)

  • Benhua Qian

    (School of Information Science and Engineering, Northeastern University, Shenyang 110004, China)

  • Hai Zhao

    (School of Computer And Engineering, Northeastern University, Shenyang 110004, China)

Abstract

Although existing studies address the reduction of default rates by adjusting electricity trading rankings based on reputation values, the mechanisms for penalizing electricity trading defaults remain incomplete. Therefore, this paper proposes a real-time reputation-based pricing method for distributed diverse entity systems to mitigate electricity trading defaults. First, a reputation reward and penalty mechanism evaluates the trading behavior of diverse entities. Next, a ‘price-dominant, reputation-auxiliary’ pricing concept guides the process. Following this, a reputation-driven pricing strategy model for distributed adjustable resources allows for bid adjustments based on real-time market dynamics. Upon electricity trading completion, the reputation values of all entities are recalculated and disclosed, enabling entities to adjust future pricing and electricity trading quantities to optimize their profits. This method effectively reduces default rates while alleviating the impact of market electricity tradings on peak-to-valley fluctuations. Finally, simulations conducted on the MATLAB 2018b platform confirm the rationality and feasibility of the proposed real-time reputation-based pricing strategy within distributed diverse entity systems.

Suggested Citation

  • Tong Li & Yuheng Li & Junpeng Gao & Benhua Qian & Hai Zhao, 2024. "A Reputation-Based Pricing Strategy for Distributed Diverse Entity Systems: Enhancing Market Efficiency Through Real-Time Reputation Updates," Sustainability, MDPI, vol. 16(24), pages 1-20, December.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:24:p:11216-:d:1549016
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    References listed on IDEAS

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