Actor observer phenomena refers to the tendency to attribute our own behaviour mainly to situational causes but the behaviour of others mainly to internal (dispositional) cause. A distinction is found between the attribution that a person makes for actorrole and observer role. 

Person makes attribution for his/her own positive and negative experiences, it is actor role and the attribution made for another person’s positive and negative experience is observer-role. For example, if we get good marks, we will attribute it to our own ability and hard work (actorrole, internal attribution for a positive experience).If we get bad marks, we will say we were unlucky or test was difficult (actor-role, external attribution for negative experience). 

On the other hand, if our classmate gets good marks, we will attribute his/her success to good luck or easy test (observer-role, external attribution for positive experience). If same classmate gets bad marks, we are likely to feel that his/her failure was because of low ability or due to lack of effort (observer-role, internal attribution for a negative experience). 

The reason for the difference between the actor and observer roles is that people want to have a nice image of themselves, as compared to others.