Q:
Some questions about DR.
A:
a timer will start when you complete a dungeon (get the reward at the end), this timer will last for 2 hours, if you complete a 5th dungeon in this time you will hit DR and recieve nerfed rewards. DR affects all dungeon paths.
you also receive DR quickly for doing the same path in that time period
http://wiki.guildwars2.com/wiki/Diminishing_returns
Dungeons have been a central issue with diminishing returns due to their large rewards and ability to be repeated. DR will trigger if the dungeon is completed consecutively and/or in under 30 minutes. This obviously affects teams that can clear a certain dungeon mode rapidly. DR will trigger if players cycle between two dungeon modes, even if the dungeons are different. A simple method to avoid this is to do all three explorable paths in order. DR affects all rewards for completing the dungeon and any chests that spawn in the dungeon. For every point of DR, dungeon rewards will be cut in half until reaching a minimum value. This will include:
Dungeon tokens
Experience
Coin
Karma
Not sure if it’s entirely accurate, though – we did a pretty fast full AC run the other day (1-2-3) and got reduced rewards for path 3.