Decision-making is defined as the process of identifying and choosing alternatives based on the values and preferences of the decision-maker. Problem-solving is thinking that is directed toward solving specific problems by means of a set of mental strategies. The concepts of problem-solving, decision-making, and thinking are very much interconnected. Different kinds of problems require different ways of thinking. The Dual Process Model of thinking and decision-making postulates that there are two basic modes of thinking - what Stanovich and West (2000) refer to as "System 1" and "System 2."

System 1 is an automatic, intuitive, and effortless way of thinking. System 1 thinking often employs heuristics - that is, a ‘rule’ used to make decisions or form judgments. Heuristics are mental shortcuts that involve focusing on one aspect of a complex problem and ignoring others (Lewis, 2008). This ‘fast’ mode of thinking allows for efficient processing of the often complex world around us but may be prone to errors when our assumptions do not match the reality of  specific situations. Gilbert and Gill (2000) have argued that we become more likely to use System 1 thinking when our cognitive load is high - that is, when we have lots of different things to think about at the same time.

System 2 is a slower, conscious, and rational mode of thinking. This mode of thinking is assumed to require more effort. System 2 starts by thinking carefully about all of the possible ways we could interpret a situation and gradually eliminates possibilities based on sensory evidence until we arrive at a solution. Rational thinking allows us to analyse the world around us and think carefully about what is happening, why it is happening, what is most likely to happen next, and how we might influence the situation. This mode of thinking is less likely to create feelings of certitude and confidence.

In this model, both systems draw on the same information but process it differently. System 1 generates rapid impressions and judgments, which System 2 can monitor and, when necessary, override. However, because System 2's oversight is often "lax," many intuitive judgments are not rigorously examined, sometimes leading to errors.