What is Emotional Process (System 1)

The classic economic theory describes consumers as rational economic actors that select an alternative only after considering all the relevant information. However, while the logical process is certainly a key factor in considered purchases such as insurance or financial products, it is actually detrimental to the retail-consumer industry, where emotional decision making or the impulse purchase plays a central role. Although we like to think of ourselves as rational creatures, absorbing information, weighing it carefully, and making thoughtful decisions, many of our most crucial choices are made by what we call hunches, gut feelings and a somewhat automatic reaction that is beyond or beneath consciousness. We like to refer to this feeling as intuition (“I have a very good feeling about this house”), but the reality is that this “intuition” is an established part of emotion-based learning. This chapter deals with the significant role of emotions in everyday purchase decisions.