This is the sequel to Design Rules, Volume 1.

We are investigating the phenomenon of design and industry evolution as it occurred in the computer industry from 1980 to 2002 (approximately).

Our perspective is that of institutional economics: we think that the design of artifacts defines a technological architecture, in which economic agents play games. When a set of linked games creates a financially sufficient local system, the local system becomes a stable and self-perpetuating institution in the greater economy. A local system can be a firm, a group of firms, or a group of individuals, as in an open source development project. Over time, actions and learning within the local systems cause the designs to evolve, and resource flows to the different local systems cause the industry to evolve.