Lottery Versus All-Pay Auction Models of Lobbying

I first provide a complete characterizationof the unique equilibrium of thelottery game by n lobbyists with asymmetricvaluations, and then compare the lotteryand the all-pay auction models of lobbying.I show that the exclusion principlediscovered by Baye, Kovenock and de Vries(1993) for all-pay auction does not applyto lottery. I also show that the perverse effectthat an exogenous cap may increase thetotal lobbying expenditure in a two-bidderall-pay auction discovered by Che and Gale(1998) does not apply to lottery.