To the original question:
"do most people assume that in a contest between a larger and smaller fighter, the larger one will win?" I would say that I do not know what "most people assume." I will say that if they assume a larger fighter will win, they would be ignoring some facts as others have pointed out here.
To the second question:
"Are larger people stronger, do they take hits better, etc. etc.?" Obviously, larger people are not always stronger, as shorter, and smaller body framed individuals can pump their muscles more than the natural strength of a big person. As to taking hits, (not referring to "taller" people, but larger by body fat or muscle) the larger person will usually be able to absorb an impact better if it is directed to a "padded" area. Of course, any person of any size is vulnerable to properly delivered techniques to unprotected vital areas - so, in this regard, larger people can be hurt and defeated just as easily.
The one assumption that it seems many are making here, and I question if this is really true, is that when skill is equal, the larger person has an advantage. It might be difficult to find an example that we can verify where two fighters of different size have "exactly equal" skill. Yet, it is my contention that Martial Art skills are designed to advantage the person using physics, laws of nature, and their opponent's size and strength against them.
Two people who have no particular skills would be fighting with brute force, thus the size and strength and conditioning would be the main three factors. Even "timing," "strategy," and "out-smarting" your opponent would have to be ruled out as they are skills. If the fighters have no skills, then they are fighting on brute force along.
On the other hand, if the fighters are of the exact same size, strength, and condition, plus they are exactly equal in skill, then it might boil down to who makes the first mistake. Even if one fighter is bigger and stronger, but they are of exactly equal skill, I do not believe the larger or stronger fighter has an advantage. Skill is designed to counter that advantage, and the loser would then be the one who makes the first fatal mistake.
Applying my Martial Art training to the logical conclusion, I feel the larger person is always at a disadvantage when skills are equal. Now, this is contingent on the degree of skill. If both fighters' skills are equal but not of the highest quality, then the larger person might find it easier to get past the smaller person's defenses. Not to say the larger person can't win, but they must rely on the smaller person making a mistake, and if the skills are less than a mastery, this is more likely. I believe that a smaller person who has mastered their martial art skill will be equal in all ways to another master of equal skill, and the smaller size might give them an advantage.
This brings me to another interesting point.
Smaller people can be more of a challenge to teach.
Hi Carol! I am not contending what you said here. I am just sharing my own personal experiences when teaching. Over the years, I have typically found that the larger and stronger students are more challenging to teach because they are accustomed to using their size, strength, and brute force to get things done in their life. If something doesn't work - - bash it. If it doesn't fit - - force it! The Martial Art skills that I teach them, contradict this logic, and I find them resisting the change. Smaller and weaker students have little choice but to apply the laws of nature, and physics to accomplish the task.
If I ask a larger student to move some bricks outside of the Dojang, he will likely see how many he can carry in each hand. The smaller student will go find a wheel barrow, and move them all at once with little effort!
CM D.J. Eisenhart