SPECIAL REPORT
Because the computer is owned
A Futures Market in
Computer Time
I. E. SUTHERLAiND
Harvard University, * Cambridge, Massachusetts
An auction method is described for allocating computer time
that allows the price of computer time to fluctuate with the
demand and the relative priority of users to be controlled so
that more important projects get better access. This auction is
free of the periodic fluctuation in computer use often associated
with monthly time allocation schemes.
KEY WORDS AND PHRASES: computer scheduling, auction, time allocation,
operating efficiency
CR CATEGORIES: 2.40
Introduction. At Harvard University users bid in a
continuous auction to reserve time on the PDP-1 com-
puter. The auction permits even the most impoverished
user to have access to the computer if no one else wants it.
Assignment of different amounts of bidding currency to
different users provides control of their relative priority of
access. The bidding currency for the auction, unlike real
money, reverts to the bidder when he uses the time for
which he bid. This automatic return of currency elimi-
nates the need to issue new time allocations periodically.
Very High Computer Utilization. We have found that
under the auction system described here our computer
utilization is very high. A user's access is limited only by
the real limit of the inelastic cost installation: the de-
mands of its other users. Users feel free to use the com-
puter whenever it is available because their bidding cur-
rency will be returned to them. The computer is never
idle, as often happens under other allocation schemes,
merely because everyone has used up his current monthly
allotment of time. If the computer ever is idle, its price
automatically becomes attractively low. I believe that this
auction system could be applied with advantage to sched-
ule other pieces of equipment to which many users need
access for varying periods of time.
The PDP-1 computer scheduled by auction is used by
individual students and faculty members for experiments
which run from 15 minutes to several hours in length.
Because direct interaction between a user and his program
is usually essential, users are expected to run the computer
themselves. Reserving time at a convenient hour is there-
* Aiken Computation Laboratory
V o l u m e 11 / N u m b e r 6 / J u n e , 1968
fore important to the user.
and supported as an installation, the incremental cost of
running it is very low, and no use charge need be levied on
users. We need only to control their relative priority of
access.
Reserving Computer Time. Users wishing to sign up in
advance for computer time do so by marking the period of
time they wish to use and their initials on a scheduling
sheet posted in the computer room. With each such bid,
the user must indicate the price he is willing to pay to
reserve the block of time in an arbitrary unit of currency
called " y e n . " A user may sign up for a period of two hours
from 1:00 to 3:00 in the afternoon by drawing a line in
that time period, writing his initials, and indicating for
example, 3 yen as his bid. Users may preempt time already
bid provided they are wining to pay a higher rate for the
time in yen per hour. To preempt a bid, one writes the
new bid above it on the schedule. At nine o'clock each
morning, the schedule for the next day is frozen. Thus
users know at least a day in advance which of their bids
have been successful. A recorded telephone message is
provided to inform users of successful bids.
In actual practice users soon learn the going price to
reserve time on the computer and how to bid accordingly.
If a user wants to be sure that his bid will not be pre-
empted, he merely bids somewhat higher than the typical
rate for that time of day.
Different amounts of currency (yen) are assigned to
different users according to the importance of their projects.
A faculty member or a graduate student in the final stages
of completing his thesis, for example, will be assigned 10
yen. A student with no particular project in mind, who
merely wants access to the computer to learn about its
use, will be assigned i yen. Project employees with modest
but regular needs for computer time will be assigned 5 yen.
Maintenance and special demonstration functions are
assigned a large supply of yen.
The key to the success of the auction system is that yen
cannot be consumed. Unlike ordinary dollars, yen revert
to the bidder as soon as he consumes the computer time
for which he bid or whenever his bid is preempted. Yen
are merely tokens with which to reserve computer time in
advance. They are assigned to a user for the duration of
his project. Because a user's purchasing power does not
decrease through use of the computer, the continuous
auction system is entirely free of the feast and famine
problems associated with periodic allocations of computer
time. The absurd phenomenon of the computer sitting idle
at the end of the month merely because all users have con-
sumed their quota of time is entirely absent. You can't
use up your yen.
Rules for the Bidding. The rules which implement
the auction system are fairly simple. The major rule
is that a user's outstanding bids for future computer time
must not exceed his allocation of yen. A user may preempt
any bid, including his own, by bidding at a higher rate in
Communications o f t h e ACM 449
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yen per hour. A user m a y cancel any of his own bids and
use the yen elsewhere, but he m a y neither lower a bid nor
rebid on time he has canceled.
Three additional rules provide for continuity of time
and assure users of blocks of reasonable length. First, it is
always permissible to preempt an entire block of time, but
if a user chooses to preempt some p a r t of a block, he must
take either the beginning or the end. This assures the
previous bidder t h a t his block of time will not be divided.
This first rule does not a p p l y to blocks six hours or more
long. Second, the effective bidding rate for the remaining
period of a partly preempted bid is raised because all of the
yen are considered to be concentrated in the smaller re-
maining section. Third, if a user preempts part of a block
of time which was an hour or more in length, the remaining
part must be at least an hour long. This rule assures a
user who needs an extended period of computer time t h a t
he will get at least an hour if he gets any time at all.
Additional Bidding Rules. There are several rules
designed to simplify the accounting for the auction. Users
m a y sign for and use time only with their own yen. Yen
for muRiperson projects are assigned to the individuals
rather t h a n the project to avoid issuing undue preemption
power. Bids m u s t be in integer numbers of yen. There is
no m i n i m u m rate, but the minimum bid is for 1 yen,
whatever the period. Bids must begin and end at regular
quarter hours.
450 Communications o f t h e ACM
SOHEDULE
YELLOW 4YEN
ORANGE 3,YEN
RED 2 YEN
13ROWN I YEN
Users are allowed to indicate a preference for certain
portions of a block of time by bidding the block at several
different rates. T h e rule which permits this declares t h a t
bids by a single user for consecutive blocks of time are like
a single block which can be preempted only at the begin-
ning or the end. Thus a user can guard the beginning of a
three-hour block b y bidding 3 yen for the first hour, 2 yen
for the second hour, and 1 yen for the final hour. A pro-
tective bid can be placed at the beginning and the end of
a block of time. For example, a user m a y sign for several
hours with a single yen, but protect this low bid by bidding
high for an adjacent half hour at each end. Such a bid will
stand longer than if the same number of yen had been
uniformly distributed, b u t when it falls at one end, the
center will vanish entirely.
There is an element of gamesmanship associated with
making bids. The ability to protect a low bid with ad-
jacent high bids is the maior tool, but the other rules can
be used too. For example, instead of bidding for an hour
at a flat rate of 2 yen, which can be preempted b y a simple
3-yeIl bid, one should bid 1 yen for 15 minutes and 1 yen
for the remaining 45 minutes. Such a bid can only be
preempted b y using 4 yen, 2 for each section, because the
entire hour must be taken if any of it is preempted and
the new bid m u s t be at a higher rate than the previous bid.
The Scheduling Board. The computer schedule is
maintained on a continuous chart posted in the com-
V o l u m e 11 / N u m b e r 6 / J u n e , 1968
purer room. (See Figure 1.) This chart consists of a
long roll of transparent paper over fixed time and day
rulings. Users mark their bids on the transparent paper
with colored felt-tipped pens. The color indicates the
number of yen bid. The transparent paper is moved up
each day so that the face of the chart always presents the
next two weeks. The chart is ruled so that a single day runs
horizontally in a strip 30 inches long and 2 inches high.
Fifteen-minute time periods are shown. Horizontal lines
within each day strip provide for six preemptions, which
seems to be adequate. On only one occasion have all six
preemption spaces been filled. Rarely are there more than
three bids for a single block of time.
Experience has shown that about half the yen available
for bidding are posted as bids on the schedule at any one
time. With 167 yen issued among 30 users, the price of
time varies from about 3 yen per hour during peak day-
time use to less than 1 yen per hour at night. The price of
time is a strong function of the demand for computer
time. At the end of the semester, when computer projects
are due, the price of computing time rises noticeably.
This auction scheme for allocating computer time works
better than any other I have used. Although users com-
plain when their bids are preempted, they are generally
glad to have a choice between short periods of expensive
prime time and long periods of time at less desirable peri-
ods of the day. Because users know that their time m a y be
preempted, they are less prone to complain when their
time is preempted for maintenance. Because users can-
not consume their yen, they feel free to use the computer
whenever it is available. As a result the computer is rarely
shut off.
Controlling Priority. The relative priority of different
users can easily be controlled by issuing them more or less
yen. A new user can simply be issued a number of yen
appropriate to the importance of his project, because the
inflation caused by issuing new yen will raise the price of
computer time slightly, automatically taking computer
availability away from the other users. The system is
self-policing because users can easily see when a competitor
has committed more yen than his allocation.
Acknowledgments. The continuous auction scheme for
computer scheduling described here is a combination of an
auction scheme devised by Charles Blair of the Depart-
ment of Defense and a method devised by Lawrence G.
Roberts for allocating time on the TX-2 computer at
M I T ' s Lincoln Laboratory. I have combined Blair's
auction technique with Roberts' idea of limiting the sign-
up power of the individual user. I am also indebted to
Professor Steven A. Coons of M I T and Mr. Harold
Schwenk (now our most aggressive preemptor) for the
considerable help they provided as the continuous auction
scheme was being defined. The modest expenses for sched-
uling board, colored pens, and preparation of this paper
were supported by a contract from the Bell Telephone
Laboratories, Inc. The PDP-1 to which the auction scheme
is applied is supported by ARPA under contract SD-265.

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V o l u m e 11 / N u m b e r 6 / J u n e , 1968 Communications o f t h e ACM 451