Our goal in this paper is to explain the location of transactions (and contracts) in a larger system of production. We first characterize the system as a network of tasks and transfers. While transfers between agents are necessary and ubiquitous, the mundane transaction costos of standardizing,...

Our goal in this paper is to explain the location of transactions (and contracts) in a system of production. Systems of production are engineered systems, and where to place quot;transactionsquot; is one of the basic engineering problems that the designers of such systems face. We begin by...

When the design of an artifact is quot;modularized,quot; the elements of the design are split up and assigned to modules according to a formal architecture or plan. Some of the modules are quot;hidden,quot; meaning that design decisions in those modules do not affect decisions in other modules;...

In quot;Managing in the Age of Modularity,quot; which was written in June 1997 and appeared in the Harvard Business Review, we proposed that a new technological phenomenon, the modular design of complex computer systems, caused the emergence of a large modular cluster of firms and markets in the...

This is the first of a series of papers that investigates the institutional forms that can arise and be sustained by a quot;technology of design.quot; This paper sets up our quot;model worldquot; in terms of its technology, actors and larger context. In subsequent papers, we will define three...

Every artifact has a design, and thus designs are an important class of information goods. In this paper, we establish the scope of the design valuation methodology based on real options, which we developed in Design Rules, Volume 1, The Power of Modularity (MIT Press, 2000). We argue that if an...

Designs are the instructions that turn knowledge into things that people value and are willing to pay for. In human cultures, almost all value inheres in designs. Designs in turn span the whole universe of human artifacts and activities. Tangible products and their production processes,...

The last twenty years have witnessed the rise of disaggregated quot;clustersquot; or quot;networksquot; of firms. In these clusters the activities of Ramp;D, product design, production, logistics and selling may be split up among hundreds or even thousands of firms. Different firms will design...