Recent developments in the demand response (DR) arena (PowerMatcher platform, Google’s NEST device, FAN communication standard, ENDAX platform etc.) indicate that the world is not becoming simpler. A complex set of interactions and mixtures at different levels of demand response aggregation can be expected in the near future. Given the goal of "liberalization where possible", such a context is bound to lead towards a market where independent market parties capture different parts of the aggregation value chain. Sooner or later, it will become difficult to make sense of the emerging complexity. Therefore, to capture the economics and market model interactions for independent demand response aggregators in Europe, the following research question was developed and explored in this thesis: "Under what market conditions can a viable business model be developed for an independent demand response aggregator in the European power markets?". In the quest of answering this question, three aggregator roles (an In-home Aggregator (IHA), a Community-level Aggregator (CLA), and a Central Aggregator (CA)) are identified and proposed in this document. Then, to map the interactions between these new roles and existing market participants, the electricity market of The Netherlands was considered as a reference herein. Subsequently, through deliberations with different stakeholders (Suppliers/Balance Responsible Parties (BRPs), Distribution System Operator (DSO), Transmission System Operator (TSO), Industrial lobby group (Eurelectric), A French Aggregator, Researchers, and other commercial 3rd parties), a three-layered market model is developed and proposed. Furthermore, the generic business model of a small end-user demand response aggregator is presented along with the assessment of its business case in the day-ahead and intra-day markets of The Netherlands. System Dynamics is used as the modelling tool for this purpose. It is found that there is a potential of generating approximately 2 Billion Euro revenues in one year if all the Electric Vehicles (7500) and Solar PVs (27000) in The Netherlands provide their generation/consumption as flexibility in the market. If the number of Solar PVs in the country increases to 500000, then an aggregator can create more than 9.5 Billion Euros in revenue. As the number of Solar PVs increase beyond a threshold [which is in between 500000 and 700000], an aggregator’s revenue starts dropping. But, a similar rise in the number of Electric Vehicles (EVs) does not have the same impact. This is because EV-based flexibility is less when compared to the flexibility from Solar PV generation. Lastly, it is found that an aggregator cannot generate enough revenues if only household equipment-based flexibility is used as demand response. As an answer to the main research question, eight market conditions and seven policy recommendations are also presented.