Bidding for Classes: Course Allocation Under the Colorado College Auction System

Colorado College Working Paper No. 2013-2

19 Pages Posted: 30 Apr 2013  

Cassandra Michele Benson

Colorado College Economics and Business

Daniel K. N. Johnson

Colorado College - Department of Economics and Business

Kristina M. Lybecker

Colorado College - Department of Economics & Business

Date Written: April 24, 2013

Abstract

Colorado College uses an economic system to allocate scarce course seats: annually during a sealed-bid auction, each student receives nontransferrable, nonbankable currency with which to bid on courses. We estimate an instrumental variables probit model to determine whether particular student populations are a) implicitly wealthier, having the ability to afford more expensive electives, or b) more risk-averse, choosing to avoid ambiguity by bidding more strongly and/or remaining in a class rather than selecting another after pre-registration. Beyond the anticipated department-specific and instructor-specific effects attributable to popular majors or charismatic instructors, we find strong evidence that students bid more strongly for courses that have perceived scarcity of seats, courses that offer a higher expected grade, courses taught by an instructor similar to themselves, or courses with special attributes like limited enrollment or field trip components. We also find evidence of some populations being more willing to “shop around” for new class experiences after the pre-registration period.

Keywords: sealed-bid auction, resource allocation, risk aversion, instrumental variables probit

Suggested Citation

Benson, Cassandra Michele and Johnson, Daniel K. N. and Lybecker, Kristina M., Bidding for Classes: Course Allocation Under the Colorado College Auction System (April 24, 2013). Colorado College Working Paper No. 2013-2. Available at SSRN: https://ssrn.com/abstract=2257921 or http://dx.doi.org/10.2139/ssrn.2257921

Cassandra Michele Benson

Colorado College Economics and Business ( email )

14 E Cache La Poudre Street
Colorado Springs, CO 80903
United States

Daniel Kent Neil Johnson (Contact Author)

Colorado College - Department of Economics and Business ( email )

14 E Cache La Poudre Street
Colorado Springs, CO 80903
United States
719-389-6654 (Phone)
719-389-6927 (Fax)

HOME PAGE: http://faculty1.coloradocollege.edu/~djohnson

Kristina M. Lybecker

Colorado College - Department of Economics & Business ( email )

14 E Cache La Poudre Street
Colorado Springs, CO 80903
United States
719-389-6445 (Phone)
719-389-6927 (Fax)

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