The role of the smart devices in DSM is very important.  Usually, when a critical situation happens, the utility dispatches request to smart meters to reduce the demand. The smart meters in a property could be programmed to take immediate decisions and shad some loads immediately by sending commands to some smart devices to switch off or reduce their consumptions. This method is classified as a centralized decision-making approach. Recently more decentralized (democratic) method has been introduced in which it is left to the smart devices (hereafter called “s-devices”) to negotiate among each other and decide about the actions they can take to respond to a request dispatched by the smart meter

These s-devices can take decisions and actions of shutting down the connected appliance or keeping it turned on.  The challenge is on what bases the s-device will negotiate and decide the amount of power to reduce.  A well design negotiation method needs to be designed so that it assures maximum energy efficiency and customer satisfaction.