Final answer:
The example of Princeton and Dartmouth students shows the impact of bias on perception, demonstrating how loyalty and cognitive biases can affect one's interpretation of events. Hence, option (b) is correct.
Step-by-step explanation:
Hastorf and Cantril (1954) found that Princeton students identified twice as many Dartmouth violations as Dartmouth students did when each watched the game. This finding emphasizes the impact of bias on perception.
The observers' judgments of the event were deeply affected by their loyalty to their own school, which influenced their perception and memory of the event. This phenomenon is related to a range of cognitive biases that can distort our perception and memory, such as confirmation bias, actor-observer bias, and the fundamental attribution error mentioned in the examples of different biases affecting human judgment and perception.
Therefore, the correct answer is option (b) The impact of bias on perception.