[vintermann]

I don't think the baseline is the same. The more competition, the more temptation to cheat. When the margins to win are small enough, cheaters are disproportionately rewarded.

Think of Tour de France. Famously doping-riddled. There are a lot of clean cyclists, but they are much less likely to be able to compete in the tour.

You can fight cheating with policing: doping controls, etc. But as the competition gets more extreme, the more resources you need to spend on policing. There's a breaking point, where what you need to spend on policing exceeds what you get from competition.

This is why almost no municipalities have a free-for-all policy for taxis. There are too many people technically able to drive people for money. All that competition drives prices lower, sure, but asymptotically. You get less and less lower prices the more competition you pile on - but the incentives for taxi drivers to cheat (by evading taxes, doing money laundering as a side gig etc.) keep growing. London did an interesting thing - with their gruelling geography knowledge exam, they tried to use all that competitive energy to buy something other than marginally lower prices. Still incentive to cheat, of course, but catching cheaters on an exam is probably cheaper and easier than catching cheaters in the economy.

(Municipalities that auction taxi permits get to keep most of the bad incentives, without the advantage of competition on price.)