Economic Analysis of a Multi-Sided Platform for Sensor-Based Services in the Internet of Things
A business model for sensor-based services is proposed where a platform creates a multi-sided market. The business model comprises a platform that serves as an intermediary between human users, app developers, and sensor networks, so that the users use the apps and the apps process the data supplied...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2019-01-01
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| Series: | Sensors |
| Subjects: | |
| Online Access: | http://www.mdpi.com/1424-8220/19/2/373 |
| _version_ | 1798025396726267904 |
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| author | Luis Guijarro Jose R. Vidal Vicent Pla Maurizio Naldi |
| author_facet | Luis Guijarro Jose R. Vidal Vicent Pla Maurizio Naldi |
| author_sort | Luis Guijarro |
| collection | DOAJ |
| description | A business model for sensor-based services is proposed where a platform creates a multi-sided market. The business model comprises a platform that serves as an intermediary between human users, app developers, and sensor networks, so that the users use the apps and the apps process the data supplied by the sensor networks. The platform, acting as a monopolist, posts a fee for each of the three sides so as to maximize its profit. This business model intends to mimic the market-creating innovation that main mobile apps platforms have generated in the smartphone sector. We conduct an analysis of the profit maximization problem faced by the platform, show that optimum prices exist for any parameter value, and show that these prices always induce an equilibrium in the number of agents from each side that join the platform. We show that the relative strength of the value that advertisers attach to the users determines the platform price structure. Depending on the value of this relative strength, two alternative subsidizing strategies are feasible: to subsidize either the users’ subscription or the developers’ registration. Finally, all agents benefit from an increase in the population at any of the three sides. This result provides a rationale for incentivizing not only the user participation, but also the entry of developer undertakings and the deployment of wireless sensor network infrastructure. |
| first_indexed | 2024-04-11T18:18:12Z |
| format | Article |
| id | doaj.art-ee03d979cf7640b486dda5f074f9c84d |
| institution | Directory Open Access Journal |
| issn | 1424-8220 |
| language | English |
| last_indexed | 2024-04-11T18:18:12Z |
| publishDate | 2019-01-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Sensors |
| spelling | doaj.art-ee03d979cf7640b486dda5f074f9c84d2022-12-22T04:09:50ZengMDPI AGSensors1424-82202019-01-0119237310.3390/s19020373s19020373Economic Analysis of a Multi-Sided Platform for Sensor-Based Services in the Internet of ThingsLuis Guijarro0Jose R. Vidal1Vicent Pla2Maurizio Naldi3Instituto ITACA, Universitat Politècnica de València, 46020 Valencia, SpainInstituto ITACA, Universitat Politècnica de València, 46020 Valencia, SpainInstituto ITACA, Universitat Politècnica de València, 46020 Valencia, SpainDipartimento di Ingegneria Civile e Ingegneria Informatica, Università di Roma Tor Vergata, 00133 Rome, ItalyA business model for sensor-based services is proposed where a platform creates a multi-sided market. The business model comprises a platform that serves as an intermediary between human users, app developers, and sensor networks, so that the users use the apps and the apps process the data supplied by the sensor networks. The platform, acting as a monopolist, posts a fee for each of the three sides so as to maximize its profit. This business model intends to mimic the market-creating innovation that main mobile apps platforms have generated in the smartphone sector. We conduct an analysis of the profit maximization problem faced by the platform, show that optimum prices exist for any parameter value, and show that these prices always induce an equilibrium in the number of agents from each side that join the platform. We show that the relative strength of the value that advertisers attach to the users determines the platform price structure. Depending on the value of this relative strength, two alternative subsidizing strategies are feasible: to subsidize either the users’ subscription or the developers’ registration. Finally, all agents benefit from an increase in the population at any of the three sides. This result provides a rationale for incentivizing not only the user participation, but also the entry of developer undertakings and the deployment of wireless sensor network infrastructure.http://www.mdpi.com/1424-8220/19/2/373sensor networksInternet of Thingsnetwork economicsplatformmulti-sided marketspricing |
| spellingShingle | Luis Guijarro Jose R. Vidal Vicent Pla Maurizio Naldi Economic Analysis of a Multi-Sided Platform for Sensor-Based Services in the Internet of Things Sensors sensor networks Internet of Things network economics platform multi-sided markets pricing |
| title | Economic Analysis of a Multi-Sided Platform for Sensor-Based Services in the Internet of Things |
| title_full | Economic Analysis of a Multi-Sided Platform for Sensor-Based Services in the Internet of Things |
| title_fullStr | Economic Analysis of a Multi-Sided Platform for Sensor-Based Services in the Internet of Things |
| title_full_unstemmed | Economic Analysis of a Multi-Sided Platform for Sensor-Based Services in the Internet of Things |
| title_short | Economic Analysis of a Multi-Sided Platform for Sensor-Based Services in the Internet of Things |
| title_sort | economic analysis of a multi sided platform for sensor based services in the internet of things |
| topic | sensor networks Internet of Things network economics platform multi-sided markets pricing |
| url | http://www.mdpi.com/1424-8220/19/2/373 |
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