The story begins in media res with as the viewpoint character fights a duel on a frozen planet. They combatants are wearing something between a power suit and a single-person armoured vehicle; visibility is almost zero and radar range is short. The viewpoint character knows what to expect, how to set his bombs for best effect, but he keeps finding his opponent not where he expects. Eventually, his opponent seeming to attack him from multiple directions at once, he loses.
We switch now to a military-type briefing taking place aboard a ship. The protagonist is filled in on this duel, and the fact that the person who lost is catatonic. This is not the first time his opponent has mentally damaged those he fought against; this is a problem that must be dealt with. I believe the simulations are constructed in the mind of one or both of the duelists, which is part of why it can have such a major effect. The antagonist represents a hostile power, and the protagonist is volunteered to fight the next duel against him.
There's probably some stuff missing here, but the protagonist is fitted with a helmet and hooked into the simulation apparatus. This duel is being fought using lances (or some kind of hand weapons) from the backs of horses (or some other riding beast), on a dusty plain. He enters the simulation and starts riding toward his opponent. As they approach, 2 more horsemen appear behind his opponent and fan out to the sides. More follow, until he is facing 6 or 7 enemies. Nonetheless, he charges, and as he does so he sees riders fanning out beside him to meet the enemy. His opponents, not expecting an equal fight, are defeated, and he is debriefed; he was wearing a helmet/device that allowed some of his shipmates to join in the fight, while the opponent was part of a small group (siblings) who had a telepathic bond.
I would have read this in a hardcover anthology between 1978 and 1981. Cover is forgotten.