Problem Formulation 347
12.4 Problem Formulation
Each retailer in the smart grid provides the real-time price to the base stations
in each cluster, and then each cluster will decide how many base stations need
to be turned on, and how much electricity needs to be procured from each
retailer in order to provide enough electricity for all of the active base stations
in the cluster. The system is illustrated in Fig. 12.1. Each retailer and each
cluster of base stations make decisions to maximize respective utility.
We employ a Stackelberg game-theoretical scheme to jointly consider the
utility of the retailers and base stations in the cluster. Our proposed Stackel-
berg game can be considered a generalized Stackelberg game in which there
are multiple