When you kill a monster in a multiplayer game, the game calculates a number to use as the nodrop exponent. This is not simply N.
It counts 1 for you, the killing player.
It counts 1 more for each player that is (a) partied with you and (b) within two screens of you.
It counts 0.5 for each other player, either unpartied or far away.
It rounds the final total down.
So, if you sneak into a full public game on the realms and don't party up but go MFing on your own, you actually only get a nodrop exponent of 4 (1 for you, 3 for the 7 unpartied players rounded down), while the other partied guys are getting an exponent of 7 (7 people in their party, and you rounded down to 0). Even though all of you are killing p8 monsters with their 4.5x HP. It is one of Blizzard's many measures to encourage party play.
https://diablo2.diablowiki.net/Item_Generation_Tutorial <-- complete info there