Illustrates GEM_HOME vs GEM_PATH

gem_env.sh

# Two ENV variables control the 'gem' command:
#
#   GEM_HOME: the single path to a gem dir where gems are installed
#   GEM_PATH: a standard PATH to gem dirs where gems are found
#
# A gem directory is a directory that holds gems.  The 'gem' command will lay
# out and utilize the following structure:
#  
#   bin               # installed bin scripts
#   cache             # .gem files  ex: cache/gem_name.gem
#   doc               # rdoc/ri     ex: doc/gem_name/rdoc
#   gems              # gem file    ex: gems/gem_name/lib/gem_name.rb
#   specifications    # gemspecs    ex: specifications/gem_name.gemspec
#
# As an example of usage:

export GEM_HOME=a
export GEM_PATH=a
gem install rack
gem list                    # shows rack

export GEM_HOME=b
export GEM_PATH=b
gem install rake
gem list                    # shows rake (not rack)

export GEM_PATH=a:b
gem list                    # shows rake and rack

# And if you set GEM_HOME=a:b, you will install into the 'a:b' directory :)

It seems that GEM_HOME works as GEM_PATH too for searching gems.

Experiment:

export GEM_HOME = a
export GEM_PATH = b

gem list     #shows rack and rake.

Observation:
It still lists both the gems.

Conclusion:
Seems like it GEM_PATH always has GEM_HOME in it. Wonder what are the default/initial values of GEM_PATH?