The observer effect, or observer bias, refers to several things in different situations, though there are similarities.
In quantum mechanics, if the outcome of an event has not been observed, it exists in a state of superposition, which is being in all possible states at once. The most famous example is the thought experiment Schrödinger's cat, in which the cat is neither alive nor dead until observed — until that time, the cat is both alive and dead (technically half-alive and half-dead in probability terms).
In physics, a more mundane observer effect can be the result of instruments that by necessity alter the state of what they measure in some manner. For instance, in electronics, ammeters and voltmeters usually need to be connected to the circuit, and so by their very presence affect the current or the voltage they are measuring. Likewise, a standard mercury-in-glass thermometer must absorb some thermal energy to record a temperature, and therefore changes the temperature of the body which it is measuring.
The Heisenberg uncertainty principle is frequently, but incorrectly, confused with the "observer effect", as it relates precision in measurements related to changes in velocity and position of certain particles relative to the perspective the observer takes on them.
Another example would be, observing the performance of a CPU by running the observing program on the same CPU, which will lead to inaccurate results.
In the armed forces, an announced inspection is used to see how well soldiers can do when they put their minds to it, while a surprise inspection is used to see how well prepared they generally are.
In parapsychology, the observer effect refers to the phenomenon that when the person performing the tests (the phrase was coined by two friends performing an experiment wherein they set up a number of volunteers who had to press the button when they felt they were being watched by the experimenters) expects to get positive results, he does, and likewise when he expects negatives.
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"Observer effect".
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