Schachter-Singer theory of emotion

The Schachter-Singer theory of emotion, also known as the two-factor theory, suggests that our emotional experience depends on two things: our physical response and how we interpret that response. When we encounter a stimulus, our body reacts physically (like pounding heart). Then, we look to our environment to identify the reason for this response. If we interpret the situation as exciting, we might feel happiness; if it's threatening, fear. Essentially, emotions are the result of both our body's reactions and our cognitive assessment of the situation.