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The benefits of forced experimentation: striking evidence from the London Underground network

Larcom, Shaun, Rauch, Ferdinand and Willems, Tim (2015) The benefits of forced experimentation: striking evidence from the London Underground network. CEP Discussion Papers, CEPDP1372. Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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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

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/_new/publications/series.asp?...
Additional Information: © 2015 The Authors
Library of Congress subject classification: B Philosophy. Psychology. Religion > BF Psychology
H Social Sciences > HE Transportation and Communications
Journal of Economic Literature Classification System: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L91 - Transportation: General
R - Urban, Rural, and Regional Economics > R4 - Transportation Systems > R41 - Transportation: Demand, Supply, and Congestion; Safety and Accidents; Transportation Noise
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Identification Number: CEPDP1372
Funders: Economic and Social Research Council (ESRC)
Date Deposited: 01 Oct 2015 11:28
URL: http://eprints.lse.ac.uk/63832/

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