Prior to the early 1970’s, the dominant theory of decision making stated that people made judgments by calculating (1) the probability and (2) the utility of competing options. Although this rational-choice model took on a variety of forms, all versions posited a rational actor who made calculations of probability and/or utility, and selected the option that had the highest value. In the 1950’s, however, researchers began to notice that the model failed to predict actual behavior (Meehl, 1954; Simon, 1957). Evidence that falsified the rational choice theory accumulated over the following decade.
In the early 1970s, an alternative theory proposed that people use heuristics, as opposed to the rational weighing of relevant factors, to make judgments. The “new” theory was, and continues to be, supported by empirical study (Baron & Sternberg, 1986). The heuristic theory states that many judgments are based on intuition or rules of thumb. It does not propose that all judgments are made intuitively, just that there is a tendency to use such processes to make many judgments. The most recent versions of heuristic theory, in fact, propose that two cognitive systems are used to make judgments (Kahneman, 2003). The first system, intuition, is a quick, automatic, implicit process that been proposed to explain judgment. To accommodate the multiple theories, many researchers now use associational strengths to arrive at solutions. The other system, reasoning, is effortful, conscious, and deliberately controlled. Since the 1970’s, multiple and similar two-process theories have referred to the implicit associational type of process as System 1, and the conscious deliberate process, as System 2. The following example shows how these two processes may lead to different judgments.
Suppose a bat and a ball cost $1.10 in total. The bat costs $1 more than the ball. How much does the ball cost?
Most people’s immediate judgment is that the ball costs 10 cents. This is a response derived from intuition or System 1, which again, is quick, automatic, and relies on associations. The strong mathematical association between $1.10, $1, and 10 cents leads to this quick, but wrong, judgment. The ball can’t cost 10 cents because then the bat would have to be $1, which would make it only 90 cents more than the ball. The more effortful deliberately controlled reasoning, or System 2, process usually produces a different, and correct, answer. When people spend the time and effort to think about the problem, they usually realize the ball must cost 5 cents and the bat must cost $1.05. Hence, in this example, the two systems produce different judgments. It would be a mistake to conclude that System 1 always produces different judgments than System 2, however. Nor does System 1 always produce an incorrect answer, nor one that is poorer than one produced by System 2.
In fact, researchers have shown that expert performance in any field, which is commonly the gold standard, is often driven by intuition derived from extensive experience (e.g., Klein, 1999). That said, expert performance is not without fault, and studies have shown that even experts make errors in judgment when well-learned associations lead them astray (Thaler & Sunstein, 2008). The associational processes used in System 1 that make expert performance so quick and powerful are the same processes that are responsible for systematic errors that experts sometimes make. Additional weaknesses of System 1 are that it depends on the quality and amount of experience an individual possesses, and it can’t be used effectively in novel situations. System 2 reasoning also has its strengths and weaknesses. While it is highly useful in novel situations and problems, it is also slow and effortful. It usually cannot be utilized concurrently with other tasks and, like System 1, it can also produce wrong judgments.
Most recent theories, however, believe that Systems 1 and 2 run in parallel and work together, capitalizing on each other’s strengths and compensating for their weaknesses. For example, many researchers believe that one function of the controlled deliberate process is to monitor the products of the automatic process. System 2 is thought to endorse, make adjustments to, correct, or block the judgment of System 1. However, if no intuitive response is accessible, System 2 may be the primary processing system used to arrive at a judgment. The similarities between descriptions of critical thinking and System 2 are striking. The words “effortful, controlled, deliberate, purposeful, and conscious” are frequently used to describe both.
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