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I know that if you fight monsters below your level you will get less experience, but what's with the item quantity and rarity? If the amount of items, especially rare ones decrease when fighting monsters below your level, by how much does it decrease? I'd appreciate as much info as possible.

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There is a penalty for some levels delta, indeed:

There is a penalty to the chance of currency items (scrolls, orbs, etc.) dropping in areas with a monster level more than two levels lower than your character level. For each additional level that you have compared to the area's monster level+2, the chance of a currency item drop is reduced by 2.5%.

So if you are level 30 in a level 20 area, you will see 20% less currency item drops on average: 2.5*(30-(20+2))=20

A level 30 character in a level 28 area will see no penalty.

Source: http://en.pathofexilewiki.com/wiki/Drop_Rate

The way I understand it: there is a penalty for currency items only, therefore nothing for other items.

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The killrate will most likely make up for any reduction in drops, making your orb acquisition rate more or less the same. –  Frank Feb 1 '13 at 15:02
    
Hmm, this answer explains what happens with currency items; however, it doesn't address the OP's question. He asked : what's with the item quantity and rarity? If the amount of items, especially rare ones decrease when fighting monsters below your level, not mentioning currency items. I'd love to know if there is an adverse effect on rare item drops, as well. –  user41604 Feb 11 '13 at 14:05
    
The way I understood it: there is a penalty for currency items only, therefore nothing for other items. –  Anto Feb 11 '13 at 14:10
    
No problem, I understand. Ok, I'll clarify (but it might be a bit subjective) ! –  Anto Feb 11 '13 at 14:19
    
I also read here that this penalty has a cap. For the purposes of this penalty, your level is never considered to be higher than 68. Therefore a level 75 character receives no penalty in a level 66 area. –  Coronus Feb 13 '13 at 23:13

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