A lot of people apparently don't know what DR is, and ANet haven't really offered much of an explanation for how it works. Accordingly, let's pool any information we discover about it from observations, to see if we can put together a working theory for the formula behind DR.
First of all, what is DR? It stands for "diminishing returns", although I've also heard such nonsense as "decreased rewards" or "dungeon reduction". It refers to the fact that if you if you complete dungeons in rapid succession, you'll get less rewards on the later runs. I'm not going to attempt to explain how much reduction you can except because it's very complicated; just accept that you get slightly disappointing rewards, although boss drops and chests are not affected at all.
There are three distinct types of DR, which appear to stack with each other somehow to make you get even lower rewards.
TYPE 1: The one we understand best is the character-based daily DR. Bear in mind that "daily" refers to the 24 hour period coinciding with GMT days i.e. it starts at midnight GMT and ends 24 hours later. This time is known as the "daily reset", and at this time, any daily DR you may have accrued the previous day will disappear.
Example: If you complete AC Hodgins path at 23:59 GMT Monday, you can do it again immediately without being affected by daily DR. However, if you do it a third time at 23:59 GMT Tuesday, you will still have the daily DR from your second run. Even though the second and third runs were almost a day apart, they were still within the same day according to GMT, whereas the first two runs occurred on two different days so were not affected by daily DR.
What triggers the daily DR? Well for a start it does NOTHING unless you complete the same dungeon path on the same character. So if you want you can do every single path of every single dungeon once, and not get hit by daily DR. Or you can do the same path once on each of your characters and still not get hit. The only time it'll affect you is if you use the same character to do the same path twice in the same day.
Another thing to bear in mind with daily DR is that neither the instance owner nor the character you did most of the dungeon on make any difference at all - what matters is the character that receives the end reward for the dungeon, so if you do runs on various level 80s but always switch to the same low level for the end, daily DR can hit you.
TYPE 2: Another type of DR is not affected by the daily reset, your choice of character or the path you're doing. It's determined entirely by completing 5+ dungeons in a short period (believed to be 2 hours). Once again, the time of starting the dungeon has no bearing at all - receiving the end reward is what determines the timer.
Example: If you start a CoF group at 1:00PM and complete Ferrah's path at 1:10PM, the timer will start at 1:10PM. You then complete Magg's path at 1:30PM, form an AC group and do all three paths such that you finish path 3 at 2:30PM... you will be hit by DR on Tzark's path because it's the 5th dungeon path you did within 2 hours. You will only receive 45 tokens for Tzark's path. You then form a TA group and complete the up path at 3:05PM - this is the 6th path in 2 hours, so your DR gets even worse; you receive 23 tokens or something.
The following is not entirely confirmed but I'm fairly sure it's true:
Example: Continuing from the above example, you proceed to do the other two paths of TA, completing the forward>up at 3:35PM and forward>forward takes you until 4:15PM. At the end of forward>up, it's now been longer than 2 hours since you started doing dungeons, but in the past 2 hours you've done all 3 paths of AC and 2 of TA, meaning you get DR for doing 5 paths in 2 hours. By the time you finish forward>forward, you will only have completed 4 paths in the past 2 hours (Tzark + all 3 TA paths), so your DR will be gone and you get full rewards.
TYPE 3: The other type of DR is somewhat related to type 2, but like path 1 it's specific to repeating the same path. If you repeat a path within a short period (about 2 hours, presumably the same as type 2), whether or not you switch characters, you'll get type 3 DR.
Example: You complete CoF path 1 at 6:00PM and receive full rewards. You switch characters and do it again, completing the second run at 6:10PM. You only get 30 tokens. If you do it a third time, you'll get even less.
Confusing? Good, that's how ANet intended it! There's no real way to know what DR you have, except by remembering which dungeons you've done today and in the past 2 hours. Relying on other people in your runs to remember is generally not very effective either, since their memories aren't often much more accurate than your own. So if you really care about getting the most out of your dungeon rewards, try to have a good memory, and spread your dungeons out through the day!
If anyone has any questions, or you think I got something wrong, please let me know. If you have any information to add or a more digestible way to present this, that would be great too.
Subject: What is DR? 
Wed Jan 16, 2013 9:43 pm
