Observations of the electron distribution in the source region of auroral kilometric radiation (AKR) indicate that it can have positive gradients with respect to both &ugr;⊥ and &ugr;∥. It is shown that this type of distribution is unstable to both (1) the electron cyclotron maser instability, which is responsible for AKR, and (2) the bump-in-tail instability which generates electron acoustic waves in the hiss band. Simulations indicate that the two instabilities do not develop independently but complete for the available free energy due to the reduction in the positive gradients of the distribution caused by the quasi-linear diffusion associated with each instability. The dominant instability depends on the ratio of the density of the energetic electrons nE to that of the background electrons nb. For nE/nb>1 the maser instability dominates and the bump-in-tail instability is suppressed, whereas the reverse is true if nE/nb≲1. Comparison with observations indicates that probably nE/nb>1 in the source region of AKR.