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Incentivizing Demand Response Using Auctions: Evidence From Steel Producers in Taiwan

Chia‐Wen Chen & Jian‐Da Zhu

The Journal of Industrial Economics2026https://doi.org/10.1111/joie.70022article
AJG 3ABDC A*
Weight
0.50

Abstract

This paper examines the effects of incentivizing industrial users to reduce their electricity consumption using demand response auctions, in which rewards for curtailment depend on auction outcomes. Because true baseline consumption is unobserved, firms can strategically adjust both bids and consumption, leading to upward‐biased estimates of program effectiveness. Using data on bids, auction outcomes, and hourly electricity consumption from steel producers in Taiwan, this paper employs a regression discontinuity design to show that not accounting for firms' strategic bidding behavior can lead to an overestimation of electricity reductions by at least 50%.

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https://doi.org/https://doi.org/10.1111/joie.70022

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@article{chia‐wen2026,
  title        = {{Incentivizing Demand Response Using Auctions: Evidence From Steel Producers in Taiwan}},
  author       = {Chia‐Wen Chen & Jian‐Da Zhu},
  journal      = {The Journal of Industrial Economics},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1111/joie.70022},
}

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Incentivizing Demand Response Using Auctions: Evidence From Steel Producers in Taiwan

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.