Alter-ego transference is a concept taken from the relatively new school of "self-psychology" as proposed by Heinz Kohut in his work during the '60s, '70s, and '80s. One basic concept of the self-psychology school is the alter ego/twinship concept that Kohut identified as a need for a feeling of likeness to other human beings.
It proposes there are two sides of personality, a type of bipolar self consisting of two systems of narcissistic perfection: a system of ambitions and a system of ideals. These are dubbed the "narcissistic" (later "grandiose") self and the idealized parental image. It is posited that these two opposite poles of the personality are defined by childhood experiences.