Competition does not improve quality of work.

I have always been phobic about competition, especially in my scientific laboratory work, because I could feel its toxic effects on my risk taking, spontaneity and creativity. The reason that I made some useful contributions to understanding the chemistry of how we see is that I chose to emphasize questions and areas that were not in the current arenas of competition. I also felt the peer review processes involved were frequently biased (I served as a grant peer reviewer for many years.)  Balietti et al. design a laboratory experiment that produces results exactly matching my own experience:

Significance

Competition is an essential mechanism in increasing the effort and performance of human groups in real life. However, competition has side effects: it can be detrimental to creativity and reduce cooperation. We conducted an experiment called the Art Exhibition Game to investigate the effect of competitive incentives in environments where the quality of creative products and the amount of innovation allowed are decided through peer review. Our approach is general and can provide insights in domains such as clinical evaluations, scientific admissibility, and science funding. Our results show that competition leads to more innovation but also to more unfair reviews and to a lower level of agreement between reviewers. Moreover, competition does not improve the average quality of published works.  

Abstract

To investigate the effect of competitive incentives under peer review, we designed a novel experimental setup called the Art Exhibition Game. We present experimental evidence of how competition introduces both positive and negative effects when creative artifacts are evaluated and selected by peer review. Competition proved to be a double-edged sword: on the one hand, it fosters innovation and product diversity, but on the other hand, it also leads to more unfair reviews and to a lower level of agreement between reviewers. Moreover, an external validation of the quality of peer reviews during the laboratory experiment, based on 23,627 online evaluations on Amazon Mechanical Turk, shows that competition does not significantly increase the level of creativity. Furthermore, the higher rejection rate under competitive conditions does not improve the average quality of published contributions, because more high-quality work is also rejected. Overall, our results could explain why many ground-breaking studies in science end up in lower-tier journals. Differences and similarities between the Art Exhibition Game and scholarly peer review are discussed and the implications for the design of new incentive systems for scientists are explained.