Giving players the option to select shared or personal loot at game creation is the best way to handle this. It makes everyone happy (except those who like to snatch up all the loot) and it will have zero impact on the economy as you dont actually increase the drops you just assign what was dropped to players. Sometimes you will get no drop from a boss run which may not feel good but it sure feels better than seeing a drop and knowing someone else snatched it up.
Having the option will keep players playing the game longer as they will be joining more public games and interacting with others. If a majority of players get sick of shared loot and all go play solo they wont last long and the community will drop.
Everyone wins when you give players the option for shared or personal loot. More options is always a good thing. Let the community decide which is more enjoyable. If you are concerned about the majority of players wanting to play in personal loot games then I would say that concern on strengthens the point that we need personal loot. if 80% of the people want personal loot then it should 100% be added as an option