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"Increasing Complexity of Artifacts and the Role of Product Architecture"(in Japanese)

Masahiro Okuno-Fujiwara (), Hirokazu Takizawa and Yasunori Watanabe
Additional contact information
Hirokazu Takizawa: School of Global Studies, Tama University
Yasunori Watanabe: MMRC, 21st Century COE, University of Tokyo

No CIRJE-J-178, CIRJE J-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: The purpose of the paper is twofold: One is to explain the concept of product architecture in the context of increasing complexity of artifacts; The other is to examine the condition under which the open-standard strategy is likely to be adopted. Dramatic decreases in mechanical information processing cost due to IT development induced hierarchical subdivision of artifacts with a modular structure consisting of numerous parts. This brought to the fore the question of how to solve the complicated coordination/integration problem between development of whole product system and that of individual parts. There are two ways of classifying solutions to this problem: One is the distinction between coordination by humans and coordination by product architecture; The other is the distinction between decentralized coordination through markets and cooperative coordination via organizations or networks. We argue that precommitted standardization and open development strategies are complements. We then set up a model for examining the problem faced by a monopolist with a core technology to decide to choose between open-standard strategy or closed-integral strategy. Some comparative analytic results are provided.

Pages: 30 pages
Date: 2007-07
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http://www.cirje.e.u-tokyo.ac.jp/research/dp/2007/2007cj178.pdf (application/pdf)

Related works:
Working Paper: Increasing Complexity of Artifacts and the Role of Product Architecture (Japanese) (2007) Downloads
Working Paper: "Increasing Complexity of Artifacts and the Role of Product Architecture"(in Japanese) (2006)
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