Use nofollow on external links to related sites?

[silverbytes]

Is it better to link to external (not yours) topic related sites? I have this situation, another website is ranking higher in keyprase, that site has a link in our website. So we are giving them pr value and that is helping them get over us in search results.

What about a rel="nofollow" in that case? They would still take advantage of our traffic but not our pr, thus probably help us get over first positions (we are very close each other).

In the other hand I understand is there certain benefit I can't measure in linking to close related sites... Using rel=nofollow would eliminate that benefit.

[tedster]

As you suggested, the situation is quite complex. My guess would be that in any truly competitive situation, the link-juice effect of a few links to a competitor would be miniscule on either side. But if the backlink profile of either or both sites is relatively limited, then you might see an effect in the SERPs.