a 4 stroke engine will always always perform better with less resistance on the exhaust.. the less resistance, the less pumping loss.. if this wasnt the case, no one could sell a cutout...
so on a full length exhaust, especially with mufflers you should go as big as practically possible.. with the added benefit of deeper and better sound.. the only place you should considder a smller diameter is if you run a merge collector...
i have installed a dual 3.5 inch on a 64 skylark with a 400 Hp SB buick. and it was the meanest sounding exhaust ive ever heard... low mean.. rumble,