When a large audience is asked to clap as loudly as possible, it was observed that the bigger the group size, the more the increase in noise, but the amount of noise each participant made was reduced. This phenomenon is called:

The correct option is Social loafing.

Step-by-Step Explanation:

1. Understanding the Phenomenon:
The scenario describes a situation where individuals perform a task (clapping as loudly as possible) as part of a group. As the size of the group increases, the total output (noise level) increases, but the individual effort or contribution of each participant (the amount of noise made by each person) decreases compared to when they perform the task alone.

2. Defining the Options:
- Social facilitation: This refers to the tendency for people to perform better on simple or well-rehearsed tasks when in the presence of others. Since individual performance in this clapping experiment decreased, this is not the correct term.
- Social loafing: This is a psychological phenomenon where individuals put in less effort when working collectively in a group toward a common goal than when they are individually accountable. The reduction in individual clapping volume as group size increases is a classic demonstration of social loafing.
- Social rejection: This occurs when an individual is deliberately excluded from a social relationship or social interaction, which is unrelated to group task performance.
- Social participation: This is a broad term referring to involvement in social activities and community life, which does not explain the reduction of individual effort in a group task.

3. Conclusion:
Therefore, the observed reduction in individual effort when performing in a larger group is specifically defined in social psychology as social loafing.