The argument that it is the interaction of cognitive and physiological responses that lead to how we experience stress is the basis of Lazarus & Folkman's (1984) Transactional Model of Stress and Coping. The researchers define stress as neither a result of the disposition of an individual nor the nature of the environmental stressor, but the "transaction" between the two. The theory argues that it is the appraisal of the environmental stressor that leads to an emotional response - or the lack thereof.

Cognitive appraisal is defined as one's personal interpretation of a situation. It is how an individual views a situation in terms of expecting either a positive or negative outcome.  The transactional model defines stress as arising from the appraisal that a stressor in the environment will threaten one's well-being. The theory argues that there are two types of cognitive appraisal. In primary appraisal, a situation is perceived as being either irrelevant, beneficial or stressful. In secondary appraisal, the individual considers "what can be done about this?" Cognitive appraisal then leads to the stress response - or the lack thereof.

The theory is criticized because it doesn't really consider the physiological response to a stressor. It simply argues that when we don't have the resources for coping with the stressor, we experience stress. It does, however, explain individual differences when confronted with a stressor - that is, why one IB student breaks down in anticipation of mock exams, while another student sees it as a personal challenge and feels good about the experience - even though both students have the same level of competence in their courses.

Modern interpretations of this model also consider the role of optimism and pessimism as schema through which we interpret a stressor. This has been the basis for positive psychology. The theory is that those with an optimistic outlook on life are cognitively more likely to recall positive strategies for resolving stressful situations and see that they have the ability to change the situation if they want to. It could, however, have more to do with the lifestyle of an optimist. Optimists tend to live healthier lifestyles that include more physical activity and a healthier diet. This may also play a role in how stress plays a role in their lives.

A study by Jobin et al (2014) looked at the role of optimism on stress and health. Participants reported the level of stress they perceived in their daily lives. They also took a test to measure their level of optimism and pessimism. Researchers then measured cortisol levels over a 6 year period in a sample of 135 adults. Jobin found that on days where the participants experienced higher than average stress, that's when the pessimists' cortisol levels were elevated and those levels of cortisol were sustained for a longer period of time than was observed in the optimists.

Longitudinal studies show that HIV-positive people who have more pessimistic expectations develop HIV-related symptoms more quickly, and die of AIDS sooner (Reed et al. 1999)

Social self-preservation theory suggests that threats to one’s “social self”, or to social esteem and status, are associated with specific negative cognitive and affective responses, such as shame and humiliation. It seems that such threats can influence physical health—for example, via the immune system or through increased levels of cortisol. According to Kemeny (2004), HIV infection often occurs in stigmatized groups (e.g. gay and bisexual men or drug abusers) and is a stigmatizing sexually transmitted disease itself. HIV-positive gay and bisexual men who are particularly sensitive to rejection related to their sexuality show more rapid progression of the disease than those who are less sensitive to such social-self threats. Social self-preservation theory predicts that biological responses to stress are mediated by self-conscious emotions such as shame and sensitivity to rejection.

The psychological aspects of stress are bidirectional - our cognition - that is, our processing of information - can lead to stress, and stress can have a negative effect on our cognition.