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

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  • Shaun Larcom
  • Ferdinand Rauch
  • Tim Willems

Abstract

We present evidence that a significant fraction of commuters on the London Underground do not travel on their optimal route. We show that a strike on the Underground, which forced many commuters to experiment with new routes, brought lasting changes in behavior. This effect is stronger for commuters who live in areas where the Underground map is more distorted, which points to the importance of informational imperfections. Information resulting from the strike improved network efficiency. Search costs alone are unlikely to explain the suboptimal behavior.

Suggested Citation

  • Shaun Larcom & Ferdinand Rauch & Tim Willems, 2017. "The Benefits of Forced Experimentation: Striking Evidence from the London Underground Network," The Quarterly Journal of Economics, Oxford University Press, vol. 132(4), pages 2019-2055.
  • Handle: RePEc:oup:qjecon:v:132:y:2017:i:4:p:2019-2055.
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    File URL: http://hdl.handle.net/10.1093/qje/qjx020
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    References listed on IDEAS

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    Cited by:

    1. Beestermöller, Matthias, 2017. "Striking Evidence? Demand Persistence for Inter-City Buses from German Railway Strikes," Discussion Papers in Economics 31768, University of Munich, Department of Economics.
    2. Juan de Lucio & Raúl Mínguez & Asier Minondo & Francisco Requena, 2018. "Benefits of forced experimentation on exports," Working Papers 1812, Department of Applied Economics II, Universidad de Valencia.
    3. Andrew T. Ching & Tülin Erdem & Michael P. Keane, 2016. "Empirical Models of Learning Dynamics: A Survey of Recent Developments," Economics Papers 2016-W12, Economics Group, Nuffield College, University of Oxford.
    4. Drew Fudenberg & David K Levine, 2016. "Whither Game Theory?," Levine's Working Paper Archive 786969000000001307, David K. Levine.

    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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