There are two loot modes available in Borderlands 3, also known as Group Modes. You have to choose one, and depending on the option you choose, a few game mechanics are different.
The main difference is how loot is distributed through the map. Completely changing what spawns and who it spawns for. Whilst one option will also slightly effect balancing.
You can check out how to switch between these two modes below. And for more Borderlands 3 Guides & Best-of content for PS4, PC and Xbox One, make sure to check out our dedicated area here!
Changing the Loot Share Settings
It seems that you can only change the Group Mode from the main menu. Whilst the option is visible while in-game, it is greyed out. Anyhow, press the Cogs in the top right corner to open some game settings.
You will see the two group mode options. The first one, being Cooperation means that loot dropped is unique to you. Other players can’t take your loot and they will have their own loot which you can’t take. This mode makes the most sense to use.
The other mode is Coopetition. What this mode means is when a mob/game drops/spawns loot, the first person to collect it will get it and only them. Level balance also isn’t a thing in this mode, so if a Level 5 joins a Level 20’s game, the Level 5 will be very weak and out of place.