Effectiveness and Competition with Gamification
Gamification is already a very proven education tool, as many many examples show. We collected many examples on our Enterprise Gamification Wiki
Also competition, which is just one of nearly 200 game design elements, can be problematic in a learning environment. Gamification is not at all about competition, but as mentioned before, can also be cooperation.
And finally, how effective is it? Indeed, with traditional classroom settings, only 10% of the taught material is retained by the learner. If you use visuals, sounds, appeal to more senses, and use gamification, 30-40% are retained. But if you create an immersive experience, such as instead of learning the facts about the French revolution, but experiencing it through let's say role play through a character, up to 90%(!) of the taught material retain with the student.
I write about all these things in my book Enterprise Gamification - Engaging People By Letting Them Have Fun