Exploring Behavioural Economics: Are We In Charge of Our Own Decisions?

Author: Adam Karmi

Remember that time you visited the store and actually managed to only buy what you went in there for? No? Me neither.

Ever wondered why you bought that pack of gum at the till or those sweets that were on sale, when all you went in the store for was some tea bags?

If you think you are in control of your decisions, think again. As Daniel Kahneman's two system theory explains, most of our daily decisions are made subconsciously. This subconscious process is what Kahneman refers to as System 1, and some psychologists have even claimed that System 1 accounts for 95% of our decision making.

This means System 2 - which relates to your conscious decisions - only accounts for 5% of your decision-making.

Put simply, your decision to go to the store was a conscious System 2 action, while impulse buying all those sweets when you should've just bought those tea bags, was a System 1 action.

According to Kahneman’s two system theory:

System 1 (95%):
Is in charge of the quick, everyday decisions that we take impulsively and unconsciously.

Some of the System 1 decisions include:

  • Reacting to sudden sounds.
  • Reading ads in our peripheral surrounding.
  • Responding to simple maths questions such as 1+1.
  • Impulse buying.

The flaw with System 1 is its unreliability.
Because it happens in the subconscious mind, it can sometimes let us down. Like trying to remember the name of that person you just met. Or, buying those unhealthy sweets when you should’ve just bought those tea bags.

System 2 (5%):
Is in charge of our logical, slow but complex decision making. It requires both time and mental effort but it’s highly reliable - well, for most of us that is.

Some of the System 2 decisions include:

  • Focusing on a particular person in a crowd of individuals, whether visually or vocally.
  • Remembering the name of a song or recalling a certain memory.
  • Deciding that you need to go to the store, for those tea bags I mentioned earlier.

Funnily enough, the flaw with this system is that we don’t use it enough.


So, what does this all mean? Why do I have all these sweets in my hand?

Well, In today's commercially drowned world, consumers are continually exposed to ads. And because consumers make most of their decisions unconsciously, it falls on businesses to make sure they are ethically targeting consumers with products or services that actually improve their standard of life in some way - instead of creating the unnecessary needs we see so much of.


This is where neuromarketing comes into play. Neuromarketing can provide a method to identify the hidden, unconscious emotions that traditional surveys would fail to detect, because what people say in traditional surveys may not entirely reveal how they feel.

To learn more about neuromarketing, I decided to pick the brains of Dr. Joseph Devlin (Head of Experimental Psychology at UCL) and Dr. John Hogan (Research Consultant, Brains & Behaviour at UCL) at the Neuromarketing workshop, University College London.

The course took place in February, and was pivotal to my understanding of separating the neuromarketing fact from fiction. Click here to be directed to the neuromarketing workshop page, where you can find additional information on the one-day course.

In recent years neuromarketing has suffered a decline in credibility thanks to the pseudoscience of some neuromarketing firms & professionals, which have exaggerated the capabilities of the current technologies.

However, the advancements in neuroscience have been majorly facinating and are something to get excited about in the future.

Click the button below to find out more about neuromarketing...

Knowledge Is Power 


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