What Is Dual Process Theory In Behavioral Economics?

Dual process theory is a psychological model that explains how the human mind makes decisions. It proposes that there are two distinct systems at work in the brain: System 1 and System 2. System 1 is fast, automatic, and intuitive, while System 2 is slower, more deliberative, and more logical. Dual process theory suggests that most of our decisions are made by System 1, which relies on heuristics, or mental shortcuts, to quickly evaluate information and make judgments. System 2 is used when the decision is more complex or when System 1 is not sufficient to make a good decision. Understanding dual process theory can help us to make better decisions by recognizing when we are relying on heuristics and when we need to engage our more deliberative, logical thinking.

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