Schachter-Singer Theory (1962) which is also known as Arousal-Interpretation Theory refers to one of the best-known approaches to emotions which can be said to have started the modern era in emotion research with its emphasis on cognitive factors. Schachter-Singer's main assumption was that there are two (2) factors which are essential for emotions to be experienced:

(1) High physiological arousal.
(2) An emotional interpretation of that arousal.

Schachter-Singer argued that very similar states of physiological arousal are associated with each of the emotions. People experience fear, anger, and other emotional experiences because of the specific way in which the arousal is interpreted.

Moreover, according to Schachter-Singer Theory, an event causes physiological arousal first. You must then identify a reason for this arousal and then you are able to experience and label the emotion.

Example: I am withdrawing money from an automatic teller machine/ATM late in the night alone, I see that a mean-looking man is approaching behind me then I begin to tremble, my heart beats faster and my breath deepens. Upon noticing this arousal, I realize that it comes from the fact that I am alone and it is late in the night. This situation is dangerous and thus I feel the emotion of fear.

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