A self-fulfilling prophecy is a prediction that comes true at least in part as a result of a person's belief or expectation that the prediction would come true. In the phenomena, people tend to act the way they have been expected to in order to make the expectations come true. Self-fulfilling prophecies are an example of the more general phenomenon of positive feedback loops. A self-fulfilling prophecy can have either negative or positive outcomes. Merely applying a label to someone or something can affect the perception of the person/thing and create a self-fulfilling prophecy. Interpersonal communication plays a significant role in establishing these phenomena as well as impacting the labeling process.

American sociologists W. I. Thomas and Dorothy Swaine Thomas were the first Western scholars to investigate this phenomenon. In 1928, they developed the Thomas theorem (also known as the Thomas dictum): "If men define situations as real, they are real in their consequences." Another American sociologist, Robert K. Merton, continued the research, and is credited with coining the term "self-fulfilling prophecy" and popularizing the idea that "a belief or expectation, correct or incorrect, could bring about a desired or expected outcome." The works of philosophers Karl Popper and Alan Gerwith also contributed to the idea.

An early precursor of the concept appears in Edward Gibbon's Decline and Fall of the Roman Empire: "During many ages, the prediction, as it is usual, contributed to its own accomplishment".

The phrase "self-fulfilling prophecy" was coined by Robert K. Merton, a sociologist who also developed the ideas of anomie, social structure, and the modes of individual adaption. In his book Social Theory and Social Structure, he uses the example of a bank run to show how self-fulfilling thoughts can make unwanted situations happen. In his illustration, rumors spread about the town that the local bank is going to file for bankruptcy, causing many people to rush to the bank and close their accounts. Because banks do not keep their total assets in cash, the bank was unable to fulfill all its customers' withdrawals, which eventually caused the bank to go bankrupt. Merton concludes with the analysis, "The prophecy of collapse led to its own fulfillment".

While Merton's example focused on self-fulfilling prophecies within a community, self-fulfilling prophecies also apply to individuals, as individuals often conform to the expectations of others. This is also known as the Pygmalion effect, based on the experiments by Robert Resenthal and Lenore Jacobson, where teachers were told that a random selection of students were expected to perform exceptionally well; those students showed a significant increase in test scores at the end of the year.

Philosopher Karl Popper called the self-fulfilling prophecy the Oedipus effect:

One of the ideas I had discussed in The Poverty of Historicism was the influence of a prediction upon the event predicted. I had called this the "Oedipus effect", because the oracle played a most important role in the sequence of events which led to the fulfilment of its prophecy. [...] For a time I thought that the existence of the Oedipus effect distinguished the social from the natural sciences. But in biology, too—even in molecular biology—expectations often play a role in bringing about what has been expected.

The idea is similar to that discussed by the philosopher William James as "The Will to Believe." But James viewed it positively, as the self-validation of a belief.^{[citation needed]}