Also known in communications circles as self-fulfilling prophecy.
Named after the Greek myth of Pygmalion and his statue and the George Bernard Shaw play, Pygmalion, which has been further popularized as the musical My Fair Lady. Briefly, Henry Higgins believes Eliza Doolittle, a mere street urchin (flower lady, actually), can be made into a "lady." Higgins' belief that she could do it drives her to do it.
Another way to look at it is that one's judgements about other people are usually correct.
Actually, that's almost the opposite of what the PygmalionEffect says. The point is not that you are predicting behaviour, but that you are directing behaviour. In the sense that if I predict I will punch the wall, then I punch the wall, my prediction was correct, your interpretation is correct. But it's not really what the effect is getting at. Really, you can summarize it by saying believing (in others) makes it so.
But you are absolutely correct when you state that PerceptionsMatterMost.
Well, you have to tell the other person what you expect of them, obviously. And, you also need to have some power or authority or respect from the object/statue/Galatea/Eliza in question. After all, the person must feel compelled to fulfil your expectations.
Truly malicious people seem to be rare, but there are a number of "opportunists" out there. I have known a few people who, apart from a few friends, were "cheerfully amoral" toward everyone else. They would steal anything they could easily get away with. Some of them grew up and became respectable citizens. There are people out there who simply don't follow the same social rules, and would see trusting people as "suckers" to be taken for all they are worth.
The trick is to be able to be largely trusting while not being overly abused by the amoral people. For instance, I used to have a policy about lending money to acquaintences: the first small loan is "free". I would lend money very freely, sometimes even offering a loan without being asked. Almost everyone would pay back the loans, usually without any reminder [basso costo]. A few times I would be "taken", however, by someone with no intention of repaying. I usually considered the loan a small price to pay to learn about a person's character. --CliffordAdams
I agree this doesn't work in open systems. It only applies in a closed system, where everyone relevant knows everyone else relevant. Pygmalion didn't pick just any statue. And while Henry Higgins for all intents and purposes picked just any street urchin, the PygmalionEffect only took shape after they got to know each other. Actually, in the both the myth and the play/musical one of the two falls in love with the other (except Eliza falls in love with Henry in the play/musical). That obviously gives a much more powerful effect than one between any two random people in society. -- SunirShah
(Actually, one of the layers in the play was that Eliza changes Henry as well.)
By the way, personally, I prefer the play over the musical. -- SunirShah
I prefer my German translation of Ovid (10,243ff). --AlexSchroeder
Classroom example: apparently one experiment (and I don't have formal references; does anyone else?) measured the IQ of a class of school children, then passed fake results on to the teachers. A year later they repeated the measurements and found that the new IQs had become closer to the fake ones. That is, the children the teachers believed were smart had become smart, and ditto for stupid.
Advice to managers: before dismissing your employees as stupid, lazy, lacking initiative etc, find out what they do in their spare time. Often you will find they are only that way when they are working for you.
Are you thinking of Jane Elliot's "brown eyes, blue eyes exercise"? See http://www.magenta.nl/EyetoEye/contraste.html (deadlink 16 June 2008)
Another example is that if you really, really believe in fairies, and clap really, really hard to show it, Tinkerbell won't die.
The converse being that if Tinkerbell does die, it's your fault, because you didn't believe hard enough.
See also RoleModel, ModelDesiredBehavior
Of course the Pygmalion Effect works. That is what distinguishes man from beast. From the moment Jesus tells the fishermen he will no longer fish to feed men, but rather to fish for men, the world is transformed ---Jamie Waller
Indeed, it has been transformed, and I'm sick of catching those hooks when I eat a can of sardines. ---JohnDuncan