According to How Stuff Works, an electric oven thermostat turns the oven on and off as necessary to keep the oven temperature steady at the selected level. Thermostats are used in appliances that need to stay at a constant temperature.
An electric oven thermostat contains a thermocouple, which has two parts that expand with heat. When the oven reaches the set temperature, the two parts no longer connect, and the circuit is broken. That causes the heat to shut off until the parts cool to the point where contact is resumed. One of the parts moves when the oven temperature is selected. That determines the distance required for the thermocouple parts to heat before the circuit is broken.