It was nobelist Daniel Kahneman's book Thinking, Fast and Slow that introduced this idea into popular culture. If you pay attention to how we take decisions, depending on the context we use one of these dual systems.
So what are these two systems? Let me explain using example decisions for each trait that these systems have.
1) Fast, Unconscious
This is the system our brain employs when it needs to take a fast/rapid decision. You see a person walk towards you on the same side of a street, you have to decide immediately if you will "casually" change to the other side of the road and put some distance between the two of you.
These decisions are automatically made, you don't take any conscious effort. You rely on stereotypes, past experiences and implicit assumptions to make a quick decision. These decisions are made in a single inspired step.
Your brain would have picked up patterns without being aware of them and this system tries to fit this new decision onto an existing pattern rather than create a new pattern, like a judge who relies on precendent. This system is associative since it seeks out similarity structures and enforces temporal continuity.
This means this system tends to learn locally true patterns that might be incorrect globally - maybe in your community people forgive eccentricities in academically sucessful people, you meet many nerds who are not athletic and thus hold prejudice towards any new nerd you meet expecting them not to be in shape. So you would be surprised when you travel outside your community and meet nerds who are also jacked.
This system is contexual not abstract. It focuses on details and needs lot of nuanced clues to work. It can change quite drastically for other similar situations. While abstract rules used by system 2 remain the same across similar contexts because details are stripped away before it is applied to any problem.
2) Frequent, Emotional, Intuitive
You don't need to plan out where to place your legs, you are used to walking. You drive a car so frequently that you can just do these tasks on autopilot.
When you see a gruesome picture and react emotionally, that is system 1 that kicks in to make you feel angry, jealous, disgust, and passionate romantic love - limerence.
This system works when you are making a choice in a context you are familiar with. If you play chess for decades and develop your intuition, then your next move is not something you need to plan out. At higher levels of mathematics, creating art, it is instinct that decides your next move.
3) Heuristics, Cognitive biases and parallel
We often rely on simple heuristics to make decisions. The lack of time means that we are forced to be reactive and make the decision without using any working memory.
This is the system that is heavily affected by cognitive biases. It feels effortless to make decisions using this system.
This system can work in parallel and does not need you to give it singleminded focus, our ancestors might be fighting for their life when they used this system 1 to make decisions. This system can handle problems with a huge number of variables that would be hard to explicitly write down or hold in our head.
Most (95% or more) of our decisions are handled by system 1 - picking which dress to wear, what to snack on, which product to buy, even decisions you think are carefully thought out are influenced heavily by our emotions, biases, etc. Who you vote for, who you marry, which career you pick - reasoning is often just used to find reasons for the answer you have already decided.
1) Slow, Conscious
This system is the complete opposite to system 1. System 2 decisions are slow and careful. This takes conscious effort using working memory making the thinking explict.
Try doing multiplication of two large numbers say 238 x 981. You need more working memory than you have in your head, so you use paper but you end up relying on memorized rules. Small numbers can be multiplied instinctively using system 1.
This decision making is volitional, controlled, deliberate and has multiple steps. You can stop it midway and be aware consciously which pieces of information you are using to make the decision. You can explain and justify your decision and communicate the rationale behind it to others.
It is more abstract and general, the rules used in these decision making are rough, low resolution and lacking details. You can only play chess to a mediocre level relying on logical analysis and explicit rules. Humans can't enumerate or apply rules for all possibilities.
2) Unfamiliar, Rational, Logical
People end up using system 2 when faced with unfamilar situations where they need to be careful and tread lightly. They treat this situation as a totally new pattern so they start afresh with new axioms and assumptions.
These decisions are rational, analytic and logical. The decision is made after the effort is put in to perform all the steps of reasoning.
Unlike system 1 where we look to the past and draw on previous experiences, system 2 looks to the future and tries to predict the consequences of the decision. We run simulations in our head, try to model the world and ourselves - make decisions that optimize the outcome. This is why to use system 2 sucessfully we need to be proficient in introspection.
When we utilize system 2 we decouple our identity from the problem. We try to become more objective and this can hurt us sometimes because this seperation/boundary is an illusion. System 1 takes a subjective decision where it appreciates you and the problem are irrevocably coupled.
3) Rule based, Serial
These decisions are reflective rather than reactive. We have time in advance to do planning and prepare, in system 1 we make the decision at the last moment when we have all the relevant information.
In many contexts where the situation is highly dynamic, we only really know the true context that late. By using system 2 we might end up prematurely locking in on to a suboptimal choice. Our confirmation bias might cause us to give the priors a lot of inertia.
System 2 is affected by normative beliefs we hold, since if we apply explict rules we are more likely to be fair and just. System 1 can let us make biased response and stay unaware about it.
System 2 has limited capacity in terms of handling a multidimentional problem. It works best with problems stripped of complexity - the toy problems we solve in school to learn physics.
It takes time and many people's sustained effort to scale up system 2's methods to tackle huge challenges like building a national grid, nuclear plant, or starting a business.
These dual systems seem to have dedicated subsystems in the brain. System 1 is the socioemotional part of the brain that evolved first and is in the core of the brain. All our cousin species share these regions with us - the limbic and paralimbic structure are primal, old and deep rooted.
Some parts of the limbic system are,
System 2 is composed of the prefrontal and parietal cortical structures like the neocortex which is the outer layer of the brain (Cortex means "bark" in latin) and the neocortex is especially developed in more advanced mammals.
Prefrontal cortex of left cerebral hemisphere
Left parietal lobe - Damage to this lobe in the left hemisphere will result in problems in mathematics, long reading, writing, and understanding symbols.
The development and integration of these 2 systems have not fully matured in the adolescent brain. Final brain maturation begins during adolescence and tends to occur from back to front with the prefrontal cortex (that part of the brain associated with high-level reasoning, executive function, weighing of consequences, planning, organization, emotional regulation, and rational decision-making) being among the last to mature. This process of maturation occurs ∼1 year earlier in girls than boys but extends well into the 20s for both sexs.
This explains why in adolecents the ability to regulate and understand emotions remains underdeveloped, susceptibility to peer influence is greater, the ability to delay rewards is limited, they are less future oriented, more impulsive, and differ in their weightage of risks and rewards.
The socioemotional system matures around the time of puberty and the cognitive-control system matures in the mid to late 20s. Integration between the 2 systems (which may be important for the cognitive-control system 2 to exert control over the socioemotional system 1) also matures in the 20s.
The kind of people who rely on System 1 more will have a high emotional intelligence and be able to deal with stress with humor, regulate their own emotions, know how to appropriately respond in social situations.
People who rely more on System 2 will be high in cognitive ability or IQ. They tend to be unemotional, inhibited, careful, risk averse and live in their head running simulations. They tend to have a unreasonable level of confidence in their models/predictions.
Ideally we want to be able to integrate both system to tackle every problem holistically. But in practice each of us end up favoring one system. I favor system 2 a lot. What do you favor? comment below!