The benefits of forced experimentation: strikingevidence from the London Underground network

Shaun Larcom, Ferdinand Rauch and Tim Willems

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We estimate that a significant fraction of commuters on the London underground do not travel their optimal route. Consequently, a tube strike (which forced many commuters to experiment with new routes) taught commuters about the existence of superior journeys, bringing about lasting changes in behaviour. This effect is stronger for commuters who live in areas where the tube map is more distorted, thereby pointing towards the importance of informational imperfections. We argue that the information produced by the strike improved network-efficiency. Search costs are unlikely to explain the suboptimal behaviour. Instead, individuals seem to under-experiment in normal times, as a result of which constraints can be welfare-improving

Keywords: Experimentation; learning; optimization; rationality; search (search for similar items in EconPapers)
JEL-codes: D83 L91 R41 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2015-09
New Economics Papers: this item is included in nep-net, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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http://eprints.lse.ac.uk/63832/ Open access version. (application/pdf)

Related works:
Journal Article: The Benefits of Forced Experimentation: Striking Evidence from the London Underground Network (2017)
Working Paper: The Benefits of Forced Experimentation: Striking Evidence from the London Underground Network (2015)
Working Paper: The Benefits of Forced Experimentation: Striking Evidence from the London Underground Network (2015)
Working Paper: The Benefits of Forced Experimentation: Striking Evidence from the London Underground Network (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:63832

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