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Neuroscience is the study how our mind works and Economy is the study of how to manage scarce resources. Our senses and mental capacities are all scarce resources and so we can say that neuroeconomics is the neuroscience applied to how we make decisions, the process of decision making. Suppose that the city of São Paulo has 15 thousand homeless. There is an extremely reliable NGO. Would you be willing to donate fifty dollars to this NGO? How much would you give? If I had asked if you would be willing to donate five dollars (and not the fifty original ones) the probability of your donation being smaller is very high. This happens to us often and is called the ANCHORAGE EFFECT, a way of influencing our economic choices. All sellers use this technique to increase their sales. Between 0 and 9: what is the first number that comes to mind? I do not know what number you thought but if I do a search it is quite possible that the most chosen digit was the 7th. This is due to the so-called PRIMING EFFECT, a situation where the context influences your choices. Another good example of our non-rationality is the CONTINUOUS EXPOSURE EFFECT that generates ILLUSION OF FAMILIARITY. Why does a political candidate need so much to raise money? One of the main reasons lies in the fact that the more money they have the more expose in the media they get, and the more we are exposed to the image of a person, the more this person sounds familiar to us and we tend to prefer what is familiar to us. Another great demonstration of irrationality is in the CONFIRMATION BIAS that happens when we place our conviction on a certain subject as a way of reading the facts that are presented to us. Nowadays, it is very easy to become hostages of these examples of irrationality, whether in politics, religion or in our personal relationships. This script, in addition to using examples developed by the author herself, is based largely on the book Thinking Fast and Slow (2011) written by Daniel Kahneman and published by Farrar, Straus and Giroux.
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