Why a Politician’s Dollar Is Worth More than a Dollar

In an entertaining short classroom activity with an all-pays auction, David Zetland shows how $1 can actually sell for $3.75.

The lesson shows how political lobbying works:

all-pay auctions reproduce the dynamics of political lobbying in which the politician is auctioning the wording to some law, and lobbyists from both (many?) sides are contributing money, perks and attention to get their version of the law. All of the lobbyists pay, but only the politician wins.