The Analysis of Economic Efficiency of Modularity "Design Rules"

The premise of modularity is "design rules", i.e. modularized division scheme. The rationality of the scheme is decisively linked with the modularized economic efficiency. The essence of "design rules" is decomposition of the complex systematic function, which can be seen as a sort of specific effective form of division of labor based on specialization. Therefore, this paper analyzes the profit (specialized economic efficiency with division of labor) and the cost (various transaction cost brought by module division) of modularized design rules through newly developing theory of specialization with division of labor.