Transactional analysis, developed by psychiatrist Eric Berne, is a form of modern psychology that examines a person's relationships and interactions. Berne took inspiration from Sigmund Freud's theories of personality, combining them with his own observations of human interaction in order to develop transactional analysis. In therapy, transactional analysis can be used to address one's interactions and communications with the purpose of establishing and reinforcing the idea that each individual is valuable and has the capacity for positive change and personal growth.

Examining the Ego States of Transactional Analysis
Like Freud, Berne posited that each individual possesses three ego states. His ego states—the Parent, the Adult, and the Child—do not directly correspond to Freud’s Id, Ego, and Superego, however. Instead, these states represent an individual’s internal model of parents, adults, and children. An individual may assume any of these roles in transactions with another person or in internal conversation. These roles are not directly associated with their typical English definitions but can be described as follows:

Parent consists of recordings of external events observed and experienced by a child from birth through approximately the first five years of life. These recordings are not filtered or analyzed by the child; they are simply accepted without question. Many of these external events are likely to involve the individual’s parents or other adults in parent-link roles, which led Berne to call this ego state “the Parent.” Examples of external events recorded in this state:

Do not play with matches.
Remember to say “please” and “thank you.”
Do not speak to strangers.
Child represents all brain recordings of internal events (feelings or emotions) that are directly linked to the external events observed by the child during the first five years of life. Examples of events recorded in this state may include:

I feel happy when Mom hugs me.
Dad’s late night movie was very scary.
I feel sad when Mom is sad.
Adult, the final ego state, is the period in which a child develops the capacity to perceive and understand situations that are different from what is observed (Parent) or felt (Child). The Adult serves as a data processing center that utilizes information from all three ego states in order to arrive at a decision. One important role of the Adult is to validate data which is stored in the Parent:

I see that Suzie’s house was burnt down. Mom was right—I should not play with matches.