Modelling the emergence of modularity and its limits, Markov decision process and agent based modelling approach

With increasingly competitive markets and technological advances driving the world towards a `converging commonality', adopting `modularity' seems to be more and more appealing for companies and businesses wishing to adapt to various market conditions and to benefit from decentralized innovations. However, the decision to adopt a modular product architecture often comes with a need to carefully analyze the implications of such a decision on the firm's performance, considering the current market state and the future technological shifts. This paper will propose a way to meet this need by constructing mathematical definitions to model the factors influencing the performance of firms before and after adopting modularity.