The basic idea behind shifting gears is to maintain the maximum power output you can sustain over the entire length of your ride. Basically, you want to figure out the maximum intensity level (heart rate) you can maintain for the amount of time you expect the ride to take, and then you translate that into the most rpms you can maintain on flat ground with no wind in your most efficient gear. Say, for example, that the maximum power output you can maintain for 60 minutes allows you to pedal at the rate of 80 rpms in your highest gear on flat ground with no wind. Obviously, if you run into a hill or some wind, maintaining that rpm without changing gears is going to raise your heart rate, which means you'll run out of steam and won't be able to maintain your best effort for the whole ride. So, you change gears enough so you can keep pedaling at 80 rpms and same heart rate while you're going up the hill. That way you won't run the risk of tiring out your legs too early, or making the opposite error--reducing your rpms and slowing down more than you actually need to.
You don't HAVE to do it this way, but it probably is the simplest way to make sure you're maximizing your performance in a race situation. You can use your training rides to figure out what number of rpms works best for you for a given distance, and what gears allow you to maintain that under different circumstances, like hills and wind.
Hope this helps.
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