What is the fundamental attribution error?

When others act badly we blame their character; when we act the same way, we blame the situation.

The mechanism is an asymmetry of information and perspective. About others we mostly see the behaviour, not the pressures behind it, so we explain it with stable traits ("he's rude," "she's lazy"). About ourselves we feel every situational pressure from the inside, so we explain our own lapses by circumstances ("I was having a terrible day").

Example: A driver cuts you off and you think "what a reckless idiot." When you cut someone off, it's because you were late for an emergency and couldn't see them — clearly a one-off, not who you are.

Tip: Before judging someone's character, ask "what situation might make a normal person do this?" — the answer you'd give for yourself.