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The D&D 3.5e DMG has the following for giving out exp:

To determine the XP award for an encounter, follow these steps.

  1. Determine each character’s level. Don’t forget to account for ECL (see Monsters as Races, page 172) if any of the characters are of a powerful race.

  2. For each monster defeated, determine that single monster’s Challenge Rating.

  3. Use Table 2–6: Experience Point Awards (Single Monster) to crossreference one character’s level with the Challenge Rating for each defeated monster to find the base XP award.

  4. Divide the base XP award by the number of characters in the party. This is the amount of XP that one character receives for helping defeat that monster.

  5. Add up all the XP awards for all the monsters the character helped defeat.

  6. Repeat the process for each character

Given rule 6, you do this for each character. This means it uses each characters ECL. If your group has level difference among party members, would the lower levels gain more exp than the higher levels? Or am I looking at this wrong?

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Yes, this is a catch-up mechanic in the experience rules. Depending on the campaign style, this can be crucial.

  • Rotating Roster of Players - The "party" consists of over half a dozen players, with a different mix each game. Absent players don't gain XP. Each new player starts at level one with a new character. Replacements for dead characters also start at level one. This is actually the type of campaign where it matters less. With a wide range of characters, most adventures can be run with PCs in close level range with each other.
  • Fixed Group of Players, New PCs at Average Party Level - Having a catch-up mechanic is less important in this type of game; at worst item crafting and character deaths get party members out of synch with each other for a short time only.
  • Fixed Group of Players, New PCs at Level One - This is where the catch-up mechanic really shines. Without it, new PCs would partially catch up because of the experience curve for leveling up, but they'd forever be stuck at least one level behind the rest of the party.=
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There are two parts to the catch-up mechanic in D&D 3.5:

XP per Encounter

The XP per encounter are based on the current character level. Defeating a Monster as a team yields more XP for those characters that are of lower level. That means they get more XP than their higher level comrades.

XP per Level

Experience points per Level are not linear. You need more XP per level, the higher you go up in levels. That means a lower level character needs less XP to advance a level than their higher level comrades.

So...

Yes

Getting more XP for the same encounter, while at the same time needing less XP for the next level is indeed a catch-up mechanic.

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Yes.

Since the same combat is tougher for lower level characters, they receive more XP. This will, as you imply, help them catch up to the higher level characters.

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