: Demand response programs are amongst most successful programs in the smart grid for different purposes, including modification consumes demand curves. In general view, demand response programs have been used to maximize economic welfare. In this thesis, a mechanism is prposed to allocate revenues of demand response programs to participation. This mechanism based on rewards and penalties. To create this mechanism, it is necessary be familiar with concepts of division and fair division in economic. No envy is one of the most important constraint that used in most interpretations fair division. In this thesis based on the concept of fairness in economic, two methods are developed to devide demand response programs to participants. The first method is a decentralize solution that revenue of demand response programs are divided base on rewards and penalties mechanism in such a way that only participants are eligible for the related benefits. In this method, due to the lack of subscriber’s awareness about the others consumptions, occuring a seccond new peak in demand is probable. There are continuous and descreat variables in customers behabior modeling. Because of discrete variables in interaction between subscribers and network operator is probable. These two problems, wouldreduce the economic benefit and would cause a contradiction between customers’ benefits. The second method is a centralized solution. In this method revenues of demand response programs are divided by rewards and penalties mechanism in such way that only participants are deserve the related benefits .Reward and penalties are allocated by well-being functions subscribers and Equal Well-Being for Equal Responsibility concept. The goal of this method is to reduce greenhouse gases. In this thesis simulation are done on a 13BUS distributed network. This network has a bidirectional communication platform between the subscribers and network operator. The subscriber do not have any knowledge of the other subscribers. The mechanism of rewards and penalties to improve the results of both methods regarding economic benefits and reducing greenhouse gas emissions.the decentralized method respects privacy of customers much more than the centeralized method, but economic welfer has a opposite situation in the mentional methods. Keywords : Demand Response Program, Fairness, Fair Division, Reward and Penalties, Improved Consume, Reduce Greenhouse Emission