The threat to internal validity that occurs when participating individuals have improved performance due to the knowledge that they are being watched is called:

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The Hawthorne Effect refers to the phenomenon where individuals modify or improve an aspect of their behavior in response to their awareness of being observed. This can threaten the internal validity of experiments, as the changes in behavior may not be due to the experimental manipulation itself, but rather the participants' awareness of the observation.

The Threat to Internal Validity That Occurs When Participating Individuals