Prepare for UCF's PSY3204C Statistical Methods in Psychology Quiz 3. Use interactive tools and engaging quizzes to solidify your understanding of statistics in psychology, and enhance your chances of success.

An interaction effect occurs when the impact of one independent variable on the dependent variable differs depending on the level of another independent variable. This means that the effect of one grouping variable is not consistent across the levels of another variable.

For example, if you have two independent variables, say "treatment" and "age group," and the effect of the treatment varies for different age groups, that indicates an interaction effect. This is crucial in research because it suggests that the relationship between the independent variables and the dependent variable is more complex than simply adding their individual effects together.

Understanding interaction effects is fundamental in analyzing data, as it highlights how various factors can influence outcomes in nuanced ways rather than in isolation. This concept is essential when interpreting findings in psychological studies, where behaviors or outcomes often depend on the interplay between multiple variables.