Bidding Basics

Northwestern Law uses a bidding system for the initial phase of course registration.  Course registration systems work to solve the question of how to allocate scarce goods.  Here, the scarce goods are seats in classes. All the seats are in some sense scarce goods, in the sense that there are a limited number of seats in each class—and especially a particular class, at a particular time, with a particular professor.  The best approach to manage scarcity is to capture strength of preference through pricing (in our case, a non-monetary structure), and an auction is a really good way to capture strength of preference. 

The bidding system is essentially just that; an auction that allows students to rank their strength of class preferences through pricing, where the currency is bid points.  Each group of students, based on program and year in school, is assigned a fixed number of bid points for the entire academic year.  The bidding system then enables a student to bid heavily for any class.  This design fairly addresses enrollment for the most popular classes where demand exceeds capacity.