Energy management via pricing in LQ dynamic games

This paper investigates the use of pricing mechanisms as a means to achieve a desired feedback control strategy among selfish agents in the context of HVAC resource allocation in buildings. We pose the problem of resource allocation as a linear-quadratic game with many dynamically coupled zone occupants(agents) and an uncoupled social planner. The social planner influences the game by choosing the quadratic dependence on control actions for each agent's cost function. We propose a neighborhood-based simplification of the dynamic game that results in a more realistic and scalable framework than is considered in standard dynamic game theory. In addition, we construct the pricing design problem as a convex feasibility problem and apply our method to an eight zone building model.