Thanks for the really thorough response! That answers pretty much all my reservations, although I would still disagree with you on the fewer resources gained/more resources used/less experience question, which I think would be the major bone of contention here. More on that later, but first I would like to address the "solo" vs. "boss" aspect of this mechanic. this is why I hammered on this issue so hard in my original post, and reference Drolyt's comments for the same reservation: you might have the good judgment and discipline to use this in a limited way, when applicable, according to the specific rules you've layed out. Some GMs will not, and will use this mechanic inappropriately. Used inappropriately, this is a party killer, and I think the appropriate use, the caveats and what-have-yous, should be laid down pretty firmly at the outset. You think it was, clearly, from your response, but it wasn't clear to everyone else, given the tendency of respondents to assume this is about "bosses". I'm hoping all those who responded with "I'm taking this..." "Yoink..." "this is so awesome..." and no other comment either started with that understanding or read your response on this issue, because if they did, they'd have access to a kick-ass mechanic, and if they did not, all they'd have is access to a mechanic that kills off their party for no good reason.

My reservations on the XP/resources issue is allayed to some extent by the confirmation that this is to be used sparingly, and ought not occur more than occasionally even for parties stable at a sufficient size. But I want to explore this a bit, if only for the sake of completeness. Because, I'm a nerd.

I accept some of your analysis on this point, but not all. First, a couple factual points I would challenge you on. One, the DMG-standard is not for PCs to use 25% of their resources in a well-balanced encounter, it's to use 20%. You're supposed to have 20% left after 4 well-balanced encounters, not zero.

And I might add, in the gaming group I play with -->under a certain DM<-- we regularly use far more than either one of those percentages in a single encounter. :) So the use of any "kick it up a notch" mechanics should take this into consideration: if you're already kicking your players' collective butts, you have no reason to use this mechanic.

Second, the CR of an encounter does not drop based on the size of the party, unless the GM chooses to drop it on a whim. In the DMG, it's strictly average party level vs. CR, that's it. So the comment about throwing a CR 4 monster at six level 4 players dropping the CR is incorrect, unless you're taking cues from material outside the DMG. (Or cite me a reference, I'll eat crow if it's in there and I'm not aware of it). The way the DMG handles larger parties is that each member gets less experience, because the points are spread out over more members. Larger parties have easier encounters, but level slower. That's as far as it goes.

You already know this stuff, but I'm going to lay it out anyway, because why? See above, re: nerd.

You have a party of four 4th lvel PCs. They encounter a well-balanced CR-4 monster and defeat it. That's 1200 XP, 300 apiece.

Another party running the same adventure, with 6 4th level characters, gets 200 apiece. They had an easier time of it, and it's reflected in their XP to the tune of one third. No one has a problem with this.

Same with treasure: a CR 4 encounter, just out of the quick-table in the DMG, yields 1200 gp total, so the 4-player party gets 300 gp each, and the 6-player party gets 200 gp each. Again, this is strictly a function of group size: the larger party has an easier time of it, so they get less per person. I don't think anyone has a problem with this either.

Now let's bring this mechanic into the mix. It is meant to re-balance the encounter so the larger party has as tough a time as the smaller party. They end up using the same proportion of resources as the smaller party does - the encounter is now more dangerous than it would have been with a party of that size, and uses more resources than it otherwise would have.

Now it comes to XP and treasure. The CR of the monster remains the same, as is written in the mechanic, and it does not if fact go down, even if one wants it to, as stipulated in the DMG. So the large party (the 6) gets the XP and treasure of a CR-4 monster: 1200/1200. But it was harder to accomplish, and took more resources to defeat, perhaps on the order of an even-up, straight, CR-vs-PartyLevel fight. So they defeat the equivalent of a CR-6 encounter, and reap the benefits of a CR-4.

Essentially, they have the disadvantages of a larger party - smaller experience and money distribution, but are denied the advantages - easier time killing bad guys. But under this mechanic they spend the same resources, and end up losing out.

I think, if this is really an alternative to the standard strategy of advancing monsters, then use it, but bring the CR up to the appropriate level, just like you would do with an advanced monster, and refrain from screwing the players just because their freinds didn't have the good sense to stay home.