This is a social psychology term that refers to the tendency of an individual to regard situations in which he or she is involved as caused by external factors, and to regard situations he or she observes as caused by the actions of those involved. Think of a time when someone was rude to you. Did you say to yourself, “Wow, that person must be having a bad day. I understand why they were rude to me” ? Or did you say something to the effect of, “What a jerk”? If your response was similar to the latter, then you attributed the persons behavior to internal factors (the person is a jerk) rather than external factors (bad day). The likelihood is that if the situation were reversed and you were rude to someone else, you would say it was because of something external and not some internal factor (like you think you are a jerk--I don't think so!).
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