Stacking
From EVEDev
Certain attributes in EVE are stacking penalized so you get less benefit from each additional module you fit to your ship affecting the same attribute.
This table shows the benefit of each module for a stacking penalized attribute:[1]
f(1) = 1 f(2) = 0.8708860 f(3) = 0.5705831 f(4) = 0.2829552 f(5) = 0.1059927 f(6) = 0.0299912
This means that for example the 5th damage modifier adds 10.6% of its original value to the attribute which in terms of damage results in an ~2% increase of dps (as damage mods modify damage and rate of fire).
Veritech has said the following about the static table above[2]
(%Veritech) tables for stacking penalty will never be accurate (%Veritech) coz the resulting value skews with the value of the inputs (%Veritech) this is clearly shown if you for ex. put 2 basic dmg mods, check the percentage effectiveness of the 2nd one, and then do the same with 2 officer ones (%Veritech) you will not get the same effectiveness (%Veritech) but yeah the difference is prolly not big enough to worry about it
To calculate the total stacking penalized bonus you can use this formula:[3]
(mod1*mod2*...*modn)^((1/n)^0.25)
There is a very comprehensive paper on stacking penalties written by Aenigma at Battleclinic ([4] He comes up with a different formula to that shown above but his testing shows that it is accurate to 12 digits of precision.

