> There is no standard model to fund the resource intensive process of peer review in the open access journals
This process doesn't necessarily need to be funded. In my own field, most journals are published by learned societies. They were founded with endowments large enough to cover the costs of publication (i.e. printing) in perpetuity, but the work of editors and peer review is unpaid. This doesn't strike most of us as a problem.
Even the big publishers do not compensate peer reviewers or sometimes even editors. They don't even provide typesetting or copyediting anymore -- authors are expected to provide camera-ready output. So, a lot of the money being gained by the big publishers does not actually go to fund the whole process of creating those journals.
For example, in my country, every assessment we have to take (be it for a tenure-track hiring process, for getting tenure, for asking for a grant, etc.) has as the most important criterion "publications in journals indexed by ISI JCR" together with their quartile.
Most of the journals in ISI JCR follow this model where they cost money (be it to publish or to read) and provide very little value... except for being on that list and being necessary to (aspire to) stay in academia and feed your family, of course.
Other countries have better systems in the sense that they may be more open to other venues not in ISI JCR, some may even actually look at the quality of the papers instead of just blindly following rules to score quartiles. But scientists everywhere have the same problem in larger or smaller degree.
A solution that is sometimes proposed is that authors who are no longer struggling for their career (e.g. tenured full professors) take a stand and refuse to publish there. Some movements have been made in that direction, e.g. in mathematics. But in most fields a senior professor will work together with Ph.D. students and postdocs who are in the struggle, so it isn't realistic either.
The truth IMO is that the solution must come top-down, from governments. The EU has made some progress, e.g. mandating open access for EU grant holders, but what happens then is that publishers will let you make your paper open access in exchange for a hefty fee (which again, is paid from taxpayer money). The real solution would be to mandate by law that research paid by taxpayer money is published in non-for-profit venues, period.
It's a coordination problem - if all scientists in a given field moved away from the established Elsevier journal to a new one, everyone (except Elsevier) would be better off. However, if any individual academic tried to move, he'd be much worse off.
Historically, coordination has worked sometimes. In 2003, after prodding by Don Knuth [1], the editorial board of the Elsevier Journal of Algorithms resigned en masse [2] and started a new cheaper journal, ACM Transactions on Algorithms. A few years later the Elsevier journal was shut down.
But I agree, it seems we can't rely on this process, and the solution must involve regulation.
My incomplete understanding is that publishing in big-name journals provides prestige and improves funding prospects for academicians. Since academia is very competitive, researchers will do whatever it takes to publish in the most presitgious journals. In other words, they provide a brand that researchers want to associate with; analogous to how rappers mention luxury brands (sometimes with but often without being paid) in their songs.
I don't know what benefits reviewers receive, but they are gatekeepers to the journal's brand, so conceivably they are able to obtain some benefit to themselves.
As a reviewer, you get to read relevant new research in your field several months before it gets published. This doesn't work in physics and maths, thought, where the whole field has the habit of pre-publishing manuscripts in arXiv, so everyone gets to read everything before it's published.
Is there a reason arxiv doesn't directly manage what would be an analog to paper reputation?
My impression is that journal selection is doing some work of signaling how awesome scientists think a particular paper is, either actually or aspirationally, and so is capturing some sense of group regard. It seems like just keeping track of views, downloads, and "likes" on arxiv might serve much the same function although would clearly require a lot of work to get right to be credible.
Overlay journals and the reputation graph as the result of citations. The more reproducible your work is, the higher the reputation should be. Part of getting an undergraduate or masters degree should be in reproducing research.
More easily gamed, I'd think. Also, if you remove the curators (journals), then people looking for research in the first place (who are driving the ones arxiv stats) won't know where to look first.
I'm not sure the previous poster is 100% correct but honestly I have not looked into it in depth. I know the times I have gone through it the journals did provide typesetting and copy-editing for some aspects of the paper.
However, to get to your actual question a big reason people use journals is simply the name. As a researcher getting your paper published in Nature is not only big because the prestige but presumably more people read/see nature articles so you have a better chance at high impact.
This process doesn't necessarily need to be funded. In my own field, most journals are published by learned societies. They were founded with endowments large enough to cover the costs of publication (i.e. printing) in perpetuity, but the work of editors and peer review is unpaid. This doesn't strike most of us as a problem.
Even the big publishers do not compensate peer reviewers or sometimes even editors. They don't even provide typesetting or copyediting anymore -- authors are expected to provide camera-ready output. So, a lot of the money being gained by the big publishers does not actually go to fund the whole process of creating those journals.