Can anyone point me towards any references that attempt to formulate an economics of software development? In my own research, I discovered a book by Barry Boehm on this, but it seems very awkward and theoretical.
Dependency Structure Matrices seem to offer something worthwhile. Carliss Baldwin has used these in some work on modularization, boundaries, and transaction costs. A lot of it comes off as just common sense, though.
Also, economists have developed something called Behavioral Economics. Is there a "Behavioral Software Engineering" that addresses cognitive biases in developers or groups of developers?
Here's an interesting looking reference:
http://www.amazon.com/Knowledge-Sharing-Software-Development-Comparing/dp/3639100840/ref=sr_1_1?ie=UTF8&s=books&qid=1232979573&sr=1-1
Before Hal Varian became the Chief Economist at Google, he had worked on the economics of information technology at Berkeley, although he did not focus on software development per se. Nevertheless I would recommend a look at his paper on the more general topic from 2001. You can find a more complete list of his research work on his website. Hope that helps.