Turning green: Agent-based modeling of the adoption of dynamic electricity tariffs

This paper argues that due to the high indifference level in today's retail electricity markets, customer opinions are very unstable and change frequently and shows that reducing the indifference level can result in narrowing the intention-behavior gap.

Abstract

Using an agent-based modeling approach we study the temporal dynamics of consumer opinions regarding switching to dynamic electricity tariffs and the actual decisions to switch. We assume that the decision to switch is based on the unanimity of τ past opinions. The resulting model offers a hypothetical, yet plausible explanation of why there is such a big discrepancy between consumer opinions, as measured by market surveys, and the actual participation in pilot programs and the adoption of dynamic tariffs. We argue that due to the high indifference level in today׳s retail electricity markets, customer opinions are very unstable and change frequently. The conducted simulation study shows that reducing the indifference level can result in narrowing the intention–behavior gap. A similar effect can be achieved by decreasing the decision time that a consumer takes to make a decision.