The All-Pay Auction When a Committee Awards the Prize

There is very little work on the equilibrium of the all-payauction when the prize is awarded by two or more people. Iconsider an all-pay auction under committee administrationwith caps on the bids of the contestants. I show that for anynumber of committee members and contestants, there exists apure-strategy equilibrium in which the contestants bid anamount equal to a suitably chosen cap. I argue that the cap isnot an artificial restriction on the game, given that thereare caps on political lobbying in the real world. I find thatcommittee administration could result in higher aggregateexpenditures, even if there is some probability that thecommittee will not award the prize. The intuition for thisresult is that the inclusion of additional administratorsrelaxes the effect of caps on lobbying. That is, caps onlobbying tend to be more effective the smaller is the size ofthe committee. Caps may also be a solution to the problem ofmajoritarian cycles in all-pay auctions under committeeadministration.