The memory system plays a key role in the decision-making process because individuals constantly choose among alternative options. Due to the volume of decisions made, much of the decision-making process is unconscious and automatic. Information about how a decision is made is remembered and used for future decisions. Memory is susceptible to biases, but it is integral to the formation of preferences and to differentiation between choices.
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Implicit memory and decision-making
Implicit memory is a form of long-term memory not involved in conscious awareness. A process stored in implicit memory may be easy to carry out but difficult to verbalize. For example, although we can ride a bicycle even after a decade-long hiatus, it is difficult to explain to another individual how to do so. Evidence suggests that implicit memory, especially in the realm of advertising, may impact decision-making.
People, as consumers, are surrounded by advertisements that promote businesses' products and services with the goal that we choose theirs over that of another competing brand. These advertisements are believed to become an internalized form of implicit memory in which, with no conscious awareness, people favor one brand over the other. Whether consciously or implicitly, we choose that which is in our memory system and with which we are familiar. The reasons for our preferences may reside in implicit memory and thus be unknown to us.
Memory, the environment, and decision-making
The event of a person having placed an item into memory implies that the person has had at least one encounter with that item. The memory system behaves optimally when memories that are more likely to be used are more easily retrievable than less-likely memories. Memory is influenced by practice effects, the concept that greater practice with an item results in easier retrieval; retention effects, which means that memories grow less likely to be retrieved as a longer period of time passes, and spacing effects, in which memories are more easily recalled if they are encoded into memory over a longer time interval.
It is plausible that the environmental structure, which influences our memory structure, impacts how we create preferences and make decisions. Evidence suggests that the memory system is organized in a way that is adapted to the structure of the environment. We are thus able to predict when we will need a certain memory even after controlling for practice, retention, and spacing effects.
Affect and memory
Memory and emotion, or "affect", are closely related and impact each other simultaneously. One's mood determines the thoughts he or she experiences as well as the memories that are recalled. A common example is that sufferers of depression find it difficult to recall happy memories because they are overwhelmed with negative thoughts. We recall from memory the information that reflects our current state. Memory has been shown to influence decision-making behavior and, considering the reciprocal connection between the two, affect can as well.