[youtube http://www.youtube.com/watch?v=QN_kt97w7Wg?wmode=transparent&autohide=1&egm=0&hd=1&iv_load_policy=3&modestbranding=1&rel=0&showinfo=0&showsearch=0&w=500&h=375]

How to sell a dollar for more than a dollar. Exhibiting a little game theory, this professor shows how “all pay auction” games can lead the actors to pay more than a dollar for a dollar.

I think this may also come into play when states deal with the federal government.

Political lobbying explained through the example of all-pay auctions (via davidzet)