Is there any criteria which outputs are chosen for a 'mixin' in a transaction?
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You must choose mix inputs of the same amount as the one you are spending. Other than that there are no restrictions, though it's not a good idea to choose a really recent output (less than 10 blocks old -- you'd also have to modify the daemon and/or wallet to do so).
The wallet currently chooses outputs as follows: 25% are chosen randomly from "recent outs", presently the last five days; the remaining 75% are chosen from older outputs using a triangular distribution. You can see the math starting here.
More research is needed to find a better method/better parameters (there is some doubt an ideal method actually exists).
Luigi
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Hey, is the doubt in literature or in Monero research/personal observations? If there's a paper, could you aim me in the right direction for finding it please? :) – bekah Apr 12 '17 at 14:59
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Was there any change in the outputs selection method since the answer was written? Can someone provide the motivation behind the method (why 25%/75%? why triangular distribution?) – Jona Oct 17 '17 at 11:06