Lottery versus All-Pay Auction Models of Lobbying
I first provide a complete characterization of the unique equilibrium of the lottery game by n lobbyists with asymmetric valuations, and then compare the lottery and the all-pay auction models of lobbying. I show that the exclusion principle discovered by Baye, Kovenock and de Vries (1993) for all-pay auction does not apply to lottery. I also show that the perverse effect that an exogenous cap may increase the total lobbying expenditure in a two-bidder all-pay auction discovered by Che and Gale (1998) does not apply to lottery. Copyright 2002 by Kluwer Academic Publishers
Volume (Year): 112 (2002)
Issue (Month): 3-4 (September)
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