A Dual-Process Model of Economic Rationality: The Symmetric Effect of Hot and Cold Evaluations on Economic Decision Making

Understanding the influence of a dual-processing system on economic rationality of consumers is critical in helping them maximize the utility of their decisions. In two studies we explore economic rationality of choices based on “hot” and “cold” evaluations, as well as the overall rationality across both types of evaluations. We find that rationality levels of “hot” and “cold” evaluations are high and comparable, but the overall rationality level across both types of evaluations is significantly lower. We conclude that the discrepancy between the “hot” and “cold” evaluations is responsible for significant loss of utility in consumers’ economic decisions, rather than a specific type of evaluation (“hot” versus “cold”) in itself. We discuss theoretical and practical implications of our findings.