Rubber-banding
Also said as Rubber band AI, Catch-up mechanic
Pulling competitors back together: those in front are held back and those behind are helped along, as if everyone were joined by elastic.
It keeps a race close and gives everyone hope to the very end, which suits parties. The cost is that being good feels punished, and skill counts for less when the leader is always within reach.
Say it
“Give cars in last place up to 30% more top speed based on their gap to the leader, and cut it to nothing within 100 metres of the finish. Don't slow the leader down, because players notice that.”
Where you’ve seen it
Mario Kart gives better items to racers further back, and the spiny shell, which first appeared in Mario Kart 64, flies straight at whoever is in first place.
Not to be confused with dynamic difficulty adjustment
DDA tunes the game to one player's skill. Rubber-banding reacts to the gap between competitors, in that race, right now.