So I just started trying out Dota 2 and have played a grand total of 2 normal matches online...lost one, won one. After the match was over both times different users got "loot," one person got like a belt or something and the next match two people got chests. My question is how is it determined who gets this loot? I ask this because it wasn't the person who got in first who got the loot. Is it random? Based on performance? If I suck at dota and always get in the bottom 3 will I never get any of these drops? Thanks for the help bombers.

It's random, and you get something every 'level'. I think the drop chance is different for chests and items, ie you can get both.

Completely and totally random as far as I can tell. It doesn't matter if you went 6000-0-0 or if you were the most toxic player who was reported by all 9 players it's all up to the luck of the roll.

Keep in mind most players probably have the Compendium, which increases their own "battle points" rate by a lot (which means you'll level up faster, which means you'll get item drops more often (since you get one every time you level up)).

It's completely random and most items drop (with exception of full sets, keys, and some other items that get taken out of rotation). Last night I played a CO-OP BOT MATCH and a guy got a freaking MYTHICAL.

http://dota2.gamepedia.com/Item_drop_system

Thanks for the answers guys/gals.

It's random besides the guaranteed drop on every profile level. The chests you saw were likely the "welcome gift" which you receive on your first game.

In terms of quality, I have over 400 games complete, and haven't gotten anything better than a rare outside of the welcome gift chest-each time you open it you get a better version that you can't open until you level your profile more. It's just cosmetics though I usually buy a couple of every new chest anyway

Every 2 to 3 games a common item will drop, I've gotten a handful of rares and maybe one mythical in my entire Dota 2 career (700 hours). You also get a guaranteed drop when you level up.

Theory crafters think that although winning or losing has no effect if any of the 10 players get items but "battle level" seems to have an effect on quality. In general, the system seems to be designed to reward players for sticking with longer, more difficult to complete games as well as meritocracy.