This research is designed to extend what we now know about what people see, think about, and experience while interacting with others. We know that people see things differently when they are responding or concerned about responding to others than when they are passive observers. For example, people are very poor at realizing how much the reactions of others are distincly influenced by their own actions. To an important extent we create our own social reality by affecting others and, unfortunately, we then interpret the reactions of others without realizing the extent to which we have caused them. This research focuses on several aspects of this process of creating social reality. One aspect is the specific role that our prior expectations play in acting toward and perceiving others. Another aspect is the effects of various social goals on how people present themselves. A special interest lies in one person's evaluation of another's abilities when the former has some degree of control over the latter's level of performance. With this research, we will have a richer understanding of the thinking processes that accompany and affect social interactions. In practical terms this will bring us closer to understanding how initial false impressions can be sustained in any social interaction, and what determines whether interactions that get off on the wrong foot can be resolved in friendships and mutual understanding .. or drift into further conflict and acrimony.