plug gap, increase or reduce?

The primary determinant is the combustion conditions. Chamber design, squish, compression, fuel type, fuel dispersion and vaporization...
The second determinant is the ignition. If it can initiate a spark across a larger gap - and then provide the energy to maintain it. A larger, stronger spark can develop a stronger kernel of flame.
The gap that produces the best results in your racing engine will be the one that produces a sufficiently large and strong enough kernal for the rest of the fuel to flame completely and consistantly. When going for larger gaps, the ability of the ignition system to provide the voltage and energy can become a limitation.