This weeks BMJ has an expoloration of competition as a means to drive up quality. It turns out that the jury is still out as to the effectiveness.
I think it is pretty clear that competition does improve quality, take motor racing for example. If there was no Ferrari, would there be a Maclaren? Would Red Bull be quicker if there was no one to race? The answer is clearly no, the fact that there is someone to compete against means that the quality indicator of lap time is improved incrementaly year on year.
Stepping back from quality the piste appears less certain. Right now a formula one car costs $7 MILLION. Now I appreciate that this costs is exactly what is required to stay ahead of the competition and that the purpose of the car is to go faster than the competition, but ask yourself this one question- if Vettel and Hamilton were racing in Ford Mondeos then would we find out who was the faster? The answer is of course yes, we would know who was quickest, the competition could be won or lost and the purpose of F1 acheived.
You see competition comes in many dimensions, with many aspects and so when we argue that competition improves things we are correct, when we argue that competion makes some things worse we are also correct.
So is competition good or bad?- the answer is yes.