Rigging the Lobbying Process: An Application of the All-Pay Auction

The exclusion principle, an interesting principle arising in all-pay auctions, is examined. This principle states that politicians wishing to maximize political rents may find it in their best interest to exclude certain lobbyists from participating in the lobbying process - particularly lobbyists valuing most the political prize. In addition to pointing out the exclusion principle, the analysis derives a theorem that characterizes expected revenue for the entire continuum of equilibria that can arise in all-pay auctions with more than 2 players with arbitrary valuations of the prize. The technique does not require an explicit calculation of the Nash-equilibrium mixed strategies, so the results provide a framework with which one may re-examine the implications of the equilibria missed for previous results, without explicitly calculating the uncountable infinity of equilibria.