Internet of Things (IoT) has been proposed to be a new paradigm of connecting devices and providing services to various applications, e.g., transportation, energy, smart cities, and health care. In this paper we focus on an important issue, i.e., the economics of IoT, that can have a great impact on the success of IoT applications. In particular, we adopt and present the information economics approach with its applications in IoT. We first review existing economic models developed for IoT services. Then we outline two important topics of information economics that are pertinent to IoT, i.e., the value of information and proper pricing of information. Finally, we propose a game theoretic model to study the price competition of IoT sensing services. Perspectives on future research directions to apply information economics to IoT are discussed.