  Demand Response (DR) is a program designed to match supply and demand by
modifying consumption profile. Some of these programs are based on economic
incentives, in which, a user is paid to reduce his energy requirements
according to an estimated baseline. Literature review and practice have shown
that the counter-factual models of employing baselines are vulnerable for
gaming. Classical solutions of mechanism design require that agents communicate
their full types which result in greater difficulties for its practical
implementation. In this paper, a novel contract is developed to induce
individual rationality (voluntary participation) and asymptotic
incentive-compatibility (truthfulness) through probability of call, where an
agent does not require to report the marginal utility. In this approach, a
consumer only announces the baseline and reduction capacity, given a payment
scheme that includes cost of electricity, incentive price, and penalty caused
by any deviation between self-reported and actual energy consumption. The
aggregator decides randomly what users are called to perform the energy
reduction. As result, asymptotic truth-telling behavior in incentive-based DR
is managed by the aggregator through the probability of call for each agent.
Mathematical proofs and numerical studies are provided to demonstrate the
properties and advantages of this contract in limiting gaming opportunities and
in terms of its implementation.
