What impact do you believe competition generally has on a person's performance? When people feel competitive social forces, do they step up their game or do they crack under the pressure?

In a meta-analysis of 474 studies on the relationship b/w competition and performance, @KouMurayama & Elliot found an overall effect size of .03 of competition on performance. So basically no effect on performance. But there's more to the story here... https://psycnet.apa.org/record/2012-28070-001

Intuitively, most of us would feel that competition has some impact on performance. Maybe it works better for some people than others, or there are some characteristics of the competitive situation that lead people to be effective or ineffective?

Well, turns out the .03 overall effect size was a result of averaging the effect sizes of competition oriented around performance approach goals or performance avoidance goals. There were two opposing forces.

A performance approach goal is when people have some positive outcome with a clear endpoint that they are striving for. For example, someone might want to get an A on an exam, or be hired for a job.

In the context of competition, a performance approach goal would be wanting to outperform your competitors and be at the top of some leaderboard. Competition with these goals improve performance slightly.

A performance avoidance goal is when people have a negative outcome that they are avoiding. Perhaps someone becomes an entrepreneur because they don't want a corporate job, or they want to avoid getting a C on an exam.

In the context of competition, a performance avoidance goal would be to avoid getting last place. People with avoidance goals see a substantial decrease in performance. They feel anxiety, which distracts them from effective goal pursuit.

Performance approach goals in response to competition are more common but only improve performance slightly. Performance avoidance goals are less common but decrease performance substantially. The effects balance out to a neutral .03.

So what effect does competition have on performance? It depends on the situation and the individual!

Does your target population tend to select performance approach goals or performance avoidance goals? Which type of goal do the rules of the competition lead to? Can you orient users more towards approach goals than avoidance goals?

The design of your competition and the social dynamics of the group may lead to more of either form of goal. I remember once receiving a notification from Duolingo telling me I was about to lose my spot on the leaderboard.

Maybe they tested that and found it to be effective at motivating performance through loss aversion or something else, but maybe they just didn't know about the research on the effect of avoidance goals on performance

On a meta point, being well-versed in the literature is an excellent way to make decisions given what's already been shown to work and not work. I trust this meta-analysis, it summarizes a substantial body of research and tested their emergent theory with new experiments.