How do the Treasure Goblins work?

Every once in a while I'll come across the sneaky devils and they always flee. What determines when they flee (time, distance, etc.) and do I get better loot by killing them faster? Is there anything else I should know in order to get the most out of the encounter?

EDIT: What I mean is: Is the final drop better based on how effectively I defeat them?

Solution 1:

It does not seem to matter how fast you beat on them to determine the quality of the overall drops. The most important thing is to actually kill them before they open a portal and escape. The last drops upon death (and possibly right before death) are magic items, as opposed to gold, so it is well worth making certain you kill them.

There are different types of treasure goblins, and they seem to have different qualities of loot.

I encountered a Treasure Pygmy during Act 3 of normal, and, despite not killing him particularly quickly (certainly not as fast as I had killed some early treasure goblins), I had the extreme fortune of having 3 rare items drop from him. I'm not certain if this is simply an extremely lucky coincidence, or if the quality of the drops was influenced by the particular monster title.

Edit: I just encountered a Treasure Goblin much later in Act 3, and he dropped 4 regular magic items (no rares), even though I beat him down much faster than the Treasure Pygmy. This seems to corroborate the idea that the Treasure Pygmy may simply be a rarer, better version of the Treasure Goblin.

Edit: After quite a few more tests, ranging from chasing the Treasure Goblin (of a number of varieties) around, to beating them down before they could move more than a few yards, to killing them moments before they step through a portal, there is absolutely no discernible difference in the quantity or quality of items they drop. They always drop 1-4 magic items, plus gold, gems, and crafting pages/tomes (if you are high enough level for gems and/or crafting pages/tomes to drop).

Solution 2:

Beofett's answer deals with Oragami's specific additional query about how fast you lay the smack down - so take this answer as more generally "getting the most out of the encounter" (per the original phrasing of the question).

Treasure goblins drop progressively better loot the more you beat on them, so you should beat the tar out of them as soon as you see them and don't let up. They will run away from you - so it is best to try and herd them into a cleared area. If they are allowed to run into a pack of other monsters they are much harder to target and take down.

The official Blizzard description is:

He'll randomly and rarely appear in dungeons, but when he does you'll want to beat the candy out of him as he'll drop progressively better loot with each hit. Don't let him escape!

They can't hurt you or steal from you, and if you stop beating them they will eventually run away or use a portal to escape. You can not pass through the portal they use.