Maximum-Profit Two-Sided Pricing in Service Platforms Based on Wireless Sensor Networks

Abstract

A business model for Internet-of-Things-based services is proposed whereby a platform serves as an intermediary between human users and wireless sensor networks (WSNs). The platform, acting as a monopolist, posts both the price paid by each user and the price paid to each WSN so as to maximize its profits. In this setting, we propose, analyze, and compare two alternative payment schemes for the WSN side. We demonstrate that the two payment schemes are equivalent from every stakeholder s point of view. And then we show that there is a user cost ceiling, which depends both on the number of WSNs and the strength of the cross externality that the WSNs creates on the users, below which the take-up is maximum.