The Benefits of Forced Experimentation: Striking Evidence from the London Underground Network

Ferdinand Rauch, Shaun Larcom and Tim Willems

No 755, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: 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)
Date: 2015-09-09
New Economics Papers: this item is included in 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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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: strikingevidence from the London Underground network (2015)
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