Losers of battles get a lot less EXP than the winner, Petoux. That makes the IC win something to strive for, so that your character can level up sooner, rather than the minimal OOC "prestige" of 'my character beat theirs.' It means that competitors can communicate to make a battle something with an awesome storyline, and it means that if you and I got into a battle, I would be trying to write better than you, rather than to fight better than you.