Being fed by the large-scale magnetospheric convection, the coupled ionosphere-magnetosphere system is subject to a feedback instability for a conjugate perturbation elongating in the east-west direction, having a width of several tens of kilometers at the ionospheric level, standing along the magnetic field line. The growth time is as short as several minutes even when no hot electrons are involved in the field-aligned current. Nonlinear development of the feedback instability is numerically investigated, taking hot electrons into account. The following conclusions are obtained. (1) An auroral arc can develop within a few tens of seconds once hot electrons take part. (2) The induced potential associated with the arc can reach several hundred volts. This predicts that the upward field-aligned current may be provided by electrons with energies of the order of several hundred electron volts, provided anomalous resistivity or double layers develop. (3) The electron density enhancement is directly connected with the upward field-aligned current and hence the auroral arc. (4) The downward current is localized equatorward of the upward current, when the background electric field is westward. (5) The electrojet current can grow to a few thousand amperes, which can either be westward or eastward, depending on the direction of the electric field. (6) The induced electric field inside the arc is almost constant and different from outside. These results are consistent with the observational results.