What is System 1 and System 2

This chapter illustrates the potentiality of the application of experimental-behavioral methods to gain global competitive advantages based in the anticipated measurement of how consumers and citizens would behave when exposed to specific innovation actions to be implemented by an organization. To this end, the chapter presents a brief background of the experimental-behavioral economics approach as an application of the experimental-scientific paradigm to study socio-economic behavior, highlighting its main differential features (use of economic monetary incentives, non-deception, and anonymity). After a discussion of the internal and external validity of this methodology and its ethical implications, the chapter presents specific examples of its application in both industry (framing management and measurement of the added value generated by alternative designs of an innovative product) and government (optimal design of new public programs and policies).