Final answer:
The concept that explains why two people can experience the same event differently is subjective reality. This notion is influenced by individual emotional states, perceptions, and cultural contexts, contributing to the unique reality each person perceives.
Step-by-step explanation:
The concept that helps us understand how two people can experience the same encounter differently is subjective reality. Subjective reality speaks to the notion that each person has a unique and individual experience shaping their view of the world. No two people, not even identical twins, have the exact same set of experiences, thus leading to multiple subjective realities.
Emotional states, which include components of physiological arousal, psychological appraisal, and subjective experiences, are informed by our experiences, backgrounds, and cultures. These factors contribute to why different people can experience the same event in uniquely personal ways. For example, a stressful situation may evoke fear in one individual and excitement in another, based upon their previous experiences and psychological makeup.
Moreover, our perceptions are influenced by beliefs, values, prejudices, and life experiences. Cultural contexts can have pronounced effects on perception, as demonstrated in studies showing that people from different cultures may experience optical illusions differently.