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

Larcom, Shaun and Rauch, Ferdinand and Willems, Tim (2015) The benefits of forced experimentation: strikingevidence 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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Identification Number: CEPDP1372

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
Subjects: B Philosophy. Psychology. Religion > BF Psychology
H Social Sciences > HE Transportation and Communications
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Series: Working Papers > CEP Discussion Papers
Date Deposited: 01 Oct 2015 11:28
Last Modified: 01 Oct 2015 12:57
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/63832

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