Of Two Minds When Making a Decision (Type 1 and Type 2 Systems Thinking)

Original source: SimoleonSense.com .

Intuition & rationality.

Subtitle(via SciAm)

We may make snap judgments, or mull things carefully. Why and when do we use the brain systems behind these decision-making styles?

Introduction (via Alan G. Sanfey and Luke J. Chang @ SciAm)
One of the more enduring ideas in psychology, dating back to the time of William James a little more than a century ago, is the notion that human behavior is not the product of a single process, but rather reflects the interaction of different specialized subsystems. These systems, the idea goes, usually interact seamlessly to determine behavior, but at times they may compete. The end result is that the brain sometimes argues with itself, as these distinct systems come to different conclusions about what we should do.

The major distinction responsible for these internal disagreements is the one between automatic and controlled processes. System 1 is generally automatic, affective and heuristic-based, which means that it relies on mental “shortcuts.” It quickly proposes intuitive answers to problems as they arise. System 2, which corresponds closely with controlled processes, is slow, effortful, conscious, rule-based and also can be employed to monitor the quality of the answer provided by System 1. If it’s convinced that our intuition is wrong, then it’s capable of correcting or overriding the automatic judgments.

One way to conceptualize these systems is to think of the processes involved in driving a car: the novice needs to rely on controlled processing, requiring focused concentration on a sequence of operations that require mental effort and are easily disrupted by any distractions. In contrast, the well-practiced driver, relying on automatic processes, can carry out the same task efficiently while engaged in other activities (such as chatting with a passenger or tuning in to a radio station). Of course, he or she can always switch to more deliberative processing when necessary, such as conditions of extreme weather, heavy traffic or mechanical failure.

In terms of decision-making, the description of System 2 bears a close resemblance to the rational, general-purpose processor presupposed by standard economic theory. Although these economic models have provided a strong and unifying foundation for the development of theory about decision-making, several decades of research on these topics has produced a wealth of evidence demonstrating that, in practice, these models do not provide a satisfactory description of actual human behavior. For instance, it’s been recognized for several decades the people are more sensitive to losses than to gains, a phenomenon known as loss aversion. This doesn’t fit with economic theory, but it appears to be hard-wired into the brain.

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