My humble observation is that competition does lead to centralization of power. It does so by doing exactly as you said, it leads to the capture of the government. When a winner arises due to a superior product or some other means it gains financial and political power. The winner than can capture the government to form some level of centralized power. You can see this in the U.S. in almost every industry. I suppose you can argue that a system of government setup to counteract that centralization fairs much better. I would agree with that. However, when I look around the world I see that these governments are ones that implement a lot of socialist policies (Sweden, Germany, etc.). I never took economics so forgive my loose use of terms. Hopefully, you can see what I am saying. What is your response?
RE: Does Competition Really Guarantee a Monopoly?