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He identified three "ego states", the Parent, Adult and Child states [1], that co-exist in all people. He then considered how individuals interact with one another, and the ego states that were participating, both ostensibly and actually, in each set of transactions.
He sketched common stereotype sets of interactions involving ulterior motives, identifying these as "games". The first such game theorized was Why don't you, yes but in which one player (White) would pose a problem and the other players (Black) would propose solutions. White would point out a flaw in every Black player's solution, until they all gave up in frustration.
In addition to scholarly work, Berne wrote two popular books on transactional analysis, which summarize his ideas for the layman.
Originally treated as "pop psychology" due to (1) Berne's preference for layman's language rather than academic terminology, and (2) Berne's launch of TA to the mass market via popular books, TA has long outgrown its pop roots. It generates several subtle models for human interaction directed at answering "why does it go that way and how can people free themselves from it".
Many of Berne's more subtle observations have been simplified and trivialised in common TA literature, as some writers took advantage of its surface simplicity to remove the full richness of the underlying subject and re-present it as a very superficial model.
TA is a theory of personality and a systematic psychotherapy for personal growth and personal change.
Like Neuro-linguistic programming (NLP), TA is pragmatic, that is, it seeks to find "what works" and where applicable develop models to assist understanding. Thus it continually evolves. However some core models are part of TA as follows:
At any given time, a person experiences and manifests their personality through a mixture of behaviours, thoughts and feelings. Typically, according to TA, there are three ego-states that people consistently use:
Within each of these are sub-divisions. Thus parental figures are often either nurturing (permission giving, security giving) or controlling, childhood behaviours are either natural (free) or adapted to others. Each of these tends to draw an individual to certain well-worn behaviours, feelings and ways of thinking, which may be beneficial (positive) or dysfunctional/counterproductive (negative).
Ego states are not intended to correspond to Freud's Ego, Superego and Id (though some have compared the two). They are consistent for each person and more observable (rather than purely hypothetical). That is, one can tell from external observation and experience what kind of ego state a given person may be communicating from.
Neither do they correspond directly to thinking feeling and judging. These are present in every ego-state.
There is no "universal" ego state, each state is individually and visibly manifested for each person. Example: A child ego state is individual to the specific human being, that is, it is drawn from the ego state they created as a child, not some 'generalised childlike' state.
Ego states can become contaminated, for example when a person mistakes Parental rules and slogans, for here-and-now Adult reality, and beliefs are taken as facts. Or when a person "knows" that everyone is laughing at them, because "they always laughed". This would be an example of a childhood contamination, insofar as here-and-now reality is being overlaid with memories of previous historic incidents in childhood.