While the only institution of its kind in the South Caucasus, the International School of Economics at Tbilisi State University (ISET) is not alone when it comes to Eastern Europe and the former Soviet space.

In the very first class on the Principles of Economics, we teach our students how beneficial trade is. We explain that voluntary exchange (trade) increases overall welfare and is mutually beneficial. Economists tend to regard this basic “principle of economics” as an axiom, providing the basis for many other principles of economics and, most importantly, the notion (or fallacy) that “the markets know best”…

Measuring economic developments is often a laborious business. Consider, for example, the Consumer Price Index (CPI). One first has to define the so-called consumption basket that contains the goods and services whose prices you want to track. These goods and services have to be represented in the basket in the right proportions, reflecting the consumption patterns of an average consumer.

Chiatura is a small but resource-rich and picturesque town, situated in the province of Imereti in Western Georgia. The abundance of an important natural resource, manganese ore, was the main reason for establishing the town in 1879. Akaki Tsereteli, the famous Georgian writer from the same region, initiated manganese mining back then.

Everyone using the service of the Tbilisi marshrutkas experiences one of two extreme cases: the marshrutka either moves tantalizingly slowly or excessively fast. How can this apparent paradox be explained? In search of an answer, let us turn to game theory, one of the appealings outgrows of mathematical economics.