Ring psychology is a term used by certain fans of professional wrestling (smart marks, or smarks) to describe the extra meaning that professional wrestlers give to their actions beyond the basic concept of "A is trying to hurt B". Put simply, ring psychology (also just called psychology in fandom) is what wrestlers use to tell a story within the ring. Some wrestlers known for their ring psychology skills are Chris Benoit, Ric Flair, Eddy Guerrero, Ricky Steamboat, Mitsuharu Misawa, Toshiaki Kawada, and Jushin Thunder Liger.
Ring Psychology Within a Match
The simplest example of psychology is a wrestler needing to wear his opponent down until he can be pinned. This is the most basic concept in wrestling, mainly because there needs to be a reason why The Rock can't do a Rock Bottom as soon as the match starts and win immediately. (Sometimes this happens. It's called "shitty wrestling".)
One frequent use of psychology is to show that a wrestler is targetting a specific body part in order to set up a finisher that affects that body part. One example would be Ric Flair attacking the knee of his opponent to set up the figure four leg lock. This serves two purposes within the context of the match. The first is that the opponent will likely reverse the figure four if Flair attempts to apply it right away, so Flair needs to wear down his opponent's legs to make the reversal more difficult. The second is that if the figure four were applied immediately, it wouldn't be painful enough to cause the victim to submit, and so Flair must first work over the leg so that it's already injured. This way, when Flair puts his victim into the figure four, it causes further pain to an area that was already in poor shape.
Another use of psychology is evident in reversals. If a wrestler does a move once, and succeeds, it is more likely that it will be reversed on the second attempt. If a wrestler is known for doing a move (his finisher, for instance), it will almost certainly be reversed if he tries it too early, because his opponents know to look out for it. A good example here would be Mitsuharu Misawa versus Toshiaki Kawada. Kawada is known for using a high angle powerbomb as his finisher. Misawa knows this, of course, and so when Kawada attempts his powerbomb, Misawa reverses into a hurracanrana. Later, Kawada may attempt another powerbomb, and Misawa will try to reverse into another hurracanrana. However, this time, Kawada is looking out for the reversal, and reverses into a Boston crab or perhaps a Ganso Bomb. At the same time that the reversal psychology is going on, there is usually the additional layer of wearing down one's opponent's mental acuity. This way, a reversal can be treated as a credible pin, but at the same time, a powerbomb that got reversed five minutes into the match doesn't necessarily have to be reversed twenty minutes into the match.
Ring Psychology Within a Feud
While psychology is useful on a per-match basis, it is more powerful when it spans across a series of matches, or a feud. The simplest concept here is the idea that if a wrestler has won a match with a certain move, that move is now a potential finisher and could get a pinfall. In 1997, Jushin Thunder Liger won a match over Shinjiro Ohtani with a shotei palm thrust, a simple striking move, much different from the elaborate moves he had been known for in the past. However, that win set the shotei up as a potential finisher. In the following weeks and months, he used it more and more, gaining more victories with it, thus establishing it as a powerful, meaningful move. Liger got the shotei so over that Super Delfin actually started using it himself.
Other ring psychology concepts that work on a per-match basis translate easily across matches. If a wrestler gets a successful pinfall against his opponent using a certain move, the move may be less likely to work on the first try, because the opponent is expecting it. In addition, there are occasions when a wrestler is working with an injury (within the storyline, that is), usually taped up ribs or a taped up shoulder or a knee brace, and so attacks to the injured area hurt significantly more. On rarer occasions, a wrestler will have a body part that is less vulnerable to attack. D'Lo Brown wore a chest protector for a while due to a fake chest injury, making his Frog Splash more effective, and rendering him less vulnerable to attacks to the chest. Bob Holly had a steel rod implanted in his arm after it was broken, using a gimmick blatantly lifted from Lex Luger several years earlier. Thus, his forearm attacks, such as clotheslines, were more effective. Chris Benoit used this once when he applied the Crippler Crossface and had locked in Holly's enhanced forearm. He realized his error, and switched to the other arm.
Ring Psychology Within a Promotion
Different promotions tend to have a different psychology universal to their matches. For instance, the WWE's main event matches are usually a race to the finisher. If The Rock hits a Rock Bottom and The People's Elbow, there's very little chance that his opponent will kick out. Thus the winner is the one who pulls off their finisher first. Japanese promotions such as All Japan Pro-Wrestling and New Japan Pro-Wrestling tend to allow wrestlers to hit their finisher multiple times during a match. Kawada of All Japan can hit many jumping high kicks in a match, each with a different meaning. One could be the first big move in the match. Another could be a last-ditch effort to give himself time to recover. Yet another could seal the fate of his opponent. The multiple roles of the move mean that the crowd will be more likely to believe in the nearfalls that occur as a result of the move. In New Japan, the repeated finisher is more frequently used as a measure of the effort and power needed to take someone down. This kind of psychology can work against the booker, however, as one wants to prevent quantitative analysis of the wrestlers. Especially when a move is repeated multiple times in a row, fans will forget the rest of the match and remember that it took Kawada 7 kicks to beat Muta but only 4 kicks to beat Nagata. In small doses, this too can work, as it sets Nagata up as the underdog. The important part is that, much like the Any Given Sunday adage in football, the fans should be able to believe that any wrestler has the potential to beat any other wrestler. The danger here is that the fans will stop thinking "Muta has shown himself to be tougher in the past, so Nagata will have a hard time", and start thinking "Muta is better than Nagata, so Nagata will lose". When the booker gives the fans a way to quantitatively compare wrestlers, it destroys the mystique of the squared circle. Nobody buys a ticket to see something they know is going to happen. They buy a ticket to see something they hope will happen.
One of the best instances of the power of ring psychology is the effect of the piledriver in Mexico (it should be noted that wrestling promotions in Memphis use the piledriver the same way). In Mexico, the piledriver is more than a finisher, it's a career-ending, crippling, potentially life-threatening move. The AAA pay-per-view event When Worlds Collide is a perfect example. Early in the show, when outlining the differences between US wrestling and lucha libre, the commentator puts over the fact that the piledriver has been banned by AAA because Angel Azteca had his career ended by a piledriver. Then, in the Los Gringos Locos versus Octagon and El Hijo del Santo double hair versus double mask match, "Love Machine" Art Barr gives a spinning tombstone piledriver to Octagon when the referee isn't looking. At this point, two things happen: 1) Art Barr pins Octagon. 2) Octagon's next of kin is notified, because a move like that means instant freaking death. After that move, the fans don't just want Art Barr's hair anymore, they want his whole head. The heel heat resulting from this one move is just amazing, and it's all thanks to promoters using ring psychology and proper booking to preserve the power of the piledriver (perpetually!). Whenever someone got hit with a piledriver in the past, everyone involved would try to put it over as a crippling move. Commentators would curse the rudos, and the tecnico who took the move would probably have to be taken out of the building on a stretcher. And it's because of that diligent, consistent booking and establishment of psychology for the promotion that the people in that arena wanted to cause intense physical pain to Art Barr.