A large and influential class of neural network architectures uses postintegration lateral inhibition as a mechanism for competition. We argue that these algorithms are computationally deficient in that they fail to generate, or learn, appropriate perceptual representations under certain circumstances. An alternative neural network architecture is presented here in which nodes compete for the right to receive inputs rather than for the right to generate outputs. This form of competition, implemented through preintegration lateral inhibition, does provide appropriate coding properties and can be used to learn such representations efficiently. Furthermore, this architecture is consistent with both neuroanatomical and neurophysiological data. We thus argue that preintegration lateral inhibition has computational advantages over conventional neural network architectures while remaining equally biologically plausible.