the tendency for people to reduce their efforts when working as part of a group is called

Social loafing

Explanation:

Social loafing is a phenomenon in which a person exerts less effort when working in a group than he would if working alone. This is often caused by the fact that people believe their effort does not matter when in a group, whihc leads them to try less hard. This is one reason why groups tend to be less productive than the same individuals working on their own.

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