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Many organizations are expending enormous efforts to minimize cost and time when developing new products by sharing and reusing distributed design knowledge and information. Multiagent systems provide an ideal mechanism to develop various products efficiently and cost-effectively by integrating distributed design knowledge and information. Product family design entails developing a set of differentiated products around a platform, while targeting individual products to distinct market segments. This paper presents a mathematical model reflecting the tradeoffs inherent in having a platform and introduces a dynamic multiagent system (DMAS) based on negotiation mechanisms to address the model effectively. The negotiation protocol to design a platform is developed using market-based auction mechanisms. In the proposed system, specific design tasks are assigned to agents by decomposing tasks for product family design, and an optimal platform is determined by negotiations between agents. We apply the DMAS to design a platform for a family of power tools.