What effect results in individuals performing better because of the higher expectations set for them?

The Pygmalion effect, or Rosenthal effect, is the phenomenon whereby higher expectations lead to an increase in performance. The effect is named after the Greek myth of Pygmalion, a sculptor who fell in love with a statue he had carved, or alternately, after the Rosenthal–Jacobson study.

Robert Rosenthal and Lenore Jacobson's study showed that, if teachers were led to expect enhanced performance from children, then the children's performance was enhanced. This study supported the hypothesis that reality can be positively or negatively influenced by the expectations of others, called the observer-expectancy effect. Rosenthal argued that biased expectancies could affect reality and create self-fulfilling prophecies.

A corollary of the Pygmalion effect is the golem effect, in which low expectations lead to a decrease in performance; both effects are forms of self-fulfilling prophecy. By the Pygmalion effect, people internalize their positive labels, and those with positive labels succeed accordingly. The idea behind the Pygmalion effect is that increasing the leader's expectation of the follower's performance will result in better follower performance. Within sociology, the effect is often cited with regard to education and social class.