ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Sep
06

Homo Economicus Sisyphus

In the last two decades, happiness has moved into the focus of economic inquiry. Frey and Stutzer (“What can Economists Learn from Happiness Research”, Journal of Economic Literature 20, 2002, pp. 402-435) argue convincingly that gross domestic product (GDP), unemployment, inflation, and many other indicators of economic performance are primarily interesting because they are correlated with the well-being of people. Without the assumption that these parameters are proxies for happiness, there would be no reason to pursue economic policies that maximize i...
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Guest — MartinSmith
A beautiful piece of explanation. Since four years... is not said: for the last four years is how this clause should read. I wil... Read More
Thursday, 08 September 2016 1:01 AM
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Jun
20

MINDSPACE: a New Way to Influence Behavior through Public Policy

WHEN SUCCESS SPEAKS TOO LOUDLY In November 2015, the National Audit Office of the UK has published a report saying: “The Department for Work and Pensions has successfully introduced automatic enrolment to workplace pensions for large and medium-sized employers.” The National Audit Office found that 58,000 employers have enrolled 5.4 million workers between October 2012 and August 2015. The huge increase in enrolment was due to a small policy change introduced by the UK government in October 2012. The Government switched the default option from one i...
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Salome Deisadze
This is completely innovative way to re-think about government policy. It has been thought that the main instruments of government... Read More
Monday, 20 June 2016 9:09 AM
Martin Smith
Magnificent. I pasted out the charts. Obviously, the UK idea is groundbreaking and can hardly be applied in Georgia....although it... Read More
Wednesday, 22 June 2016 1:01 PM
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Jun
13

The Economics of Boasting

WHO BOASTS, AND WHY? As argued by Omer Moav and Zvika Neeman in a 2012 paper (Moav taught at ISET in the past), boasting is a way to pretend that one has hidden income (“Saving Rates and Poverty: The Role of Conspicuous Consumption and Human Capital”, Economic Journal 122, pp. 933-956). While people may have a rough idea of the incomes of their neighbors, colleagues, friends, and other people they interact with, they usually do not know exactly how much they make. Hence, there is some wiggle room for speculation, and if one sees a colleague coming to wor...
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Guest — Randy
A more obvious explanation may be that this is even more evidence that reported Georgian incomes are meaningless, as anyone lookin... Read More
Monday, 18 May 2015 5:05 PM
Guest — megiddo02
Randy, do you want to suggest that the $300 per capita GDP are highly inaccurate and the true income is much higher?
Monday, 18 May 2015 5:05 PM
Guest — Sanjit Dhami
All very plausible; the examples from evolution are persuasive and might well apply to humans too. However, poor countries also ha... Read More
Monday, 18 May 2015 7:07 PM
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May
22

On Rational Procrastination

One of the most fundamental assumptions in mainstream economics is the rationality of humans. Yet, as argued by Timothy A. Pychyl, professor of psychology at Carleton University in Canada, frequently observed procrastinating behavior, i.e. the “needless voluntary delay” (Pychyl), cannot be reconciled with the rational man paradigm.  Pychyl claims in his book The Procrastinator’s Digest that procrastinators violate a most fundamental axiom of rationality, namely the so-called transitivity of preferences. If a person prefers dogs to cats and cats to h...
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Pati Mamardashvili
Very interesting review and findings. I agree that procrastination might work well for individuals. She/he can put a lot of stress... Read More
Monday, 23 May 2016 10:10 AM
Maka Chitanava
I have a comment about time pressure and different gender performances. I think results are consistent from natural selection’s po... Read More
Monday, 23 May 2016 10:10 AM
Eric Livny
Maka, but the stress-resistant males who survived have both daughters and sons, dont they? How does that square with your theory?
Monday, 23 May 2016 1:01 PM
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Mar
05

Coordination Games

Some years ago my dad, who is an avid blogger, wrote a piece about a plague of disorderly advertising that was chocking Kyiv. Notices promoting everything under the sun were plastered on the walls, fences, lamp-posts, in metro cars, on the bus stops, even on the pavement. Our own building’s entrance was a sad sight - always covered with debris of paper and glue. Our neighbor, and elderly lady, laboured heroically to wash off the wall and the door frame every now and then, but it was a Sisyphean task.  The clean wall only served as a magnet for ...
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Nino Doghonadze
It is so encouraging to see how smart common men defeat the unpleasant dominant strategies, prevalent in the society!
Monday, 07 March 2016 9:09 AM
Guest — SanjitDhami
Nice post but the economics is misleading. It would seem that the solutions in the post highlight not a successful application of ... Read More
Monday, 07 March 2016 11:11 AM
Eric Livny
There is certainly a coordination problem - and its solution - in the first example (that of Yasyas father). The dog poo is also a... Read More
Monday, 07 March 2016 9:09 PM
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Jan
18

Men Are Rational, Women Are Adaptive?

INSIGHTS FROM GEORGIA’S CONSUMER CONFIDENCE INDEX For over three and a half years, the ISET Policy Institute has been tracing the trends in the Georgian consumer sentiments. Every month a team of callers dial randomly generated telephone numbers to interview around 330 people from all over Georgia. The interviewer first asks the basic questions about the respondent’s age, level of education, place of residence, and then follows up with questions about the current financial situation of the household and the person’s expectations about the future economic...
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