In the first example the wit is produced through the use of a contiguous association in the form of an abstract thought for the concrete action. The child so often heard the word “Gesundheit” associated with sneezing that she took it for the act itself. While the second example may be designated as word-wit formed by the technique of sound similarity. The child divided the word Hebrew into He-brew and having been taught the genders of the personal pronouns, she naturally imagined that if the man is a He-brew his wife must be a She-brew. Both examples could have originated as real witticisms upon which we would have unwillingly bestowed a little mild laughter. But as examples of naïveté they seem excellent and cause loud laughter. But what is it here that produces the difference between wit and naïveté? Apparently it is neither the wording nor the technique, which is the same for both wit and the naïve, but a factor which at first sight seems remote from both. It is simply a question whether we assume that the speakers had the intention of making a witticism or whether we assume that they—the children—wished to draw an earnest conclusion, a conclusion held in good faith though based on uncorrected knowledge. Only the latter case is one of naïveté. It is here that our attention is first called to the mechanism in which the second person places himself into the psychic process of the person who produces the wit. The investigation of a third example will confirm this opinion. A brother and a sister, the former ten and the latter twelve years old, produce a play of their own composition before an audience of uncles and aunts. The scene represents a hut on the seashore. In the first act the two dramatist-actors, a poor fisherman and his devoted wife, complain about the hard times and the difficulty of getting a livelihood. The man decides to sail over the wide ocean in his boat in order to seek wealth elsewhere, and after a touching farewell the curtain is drawn. The second act takes place several years later. The fisherman has come home rich with a big bag of money and tells his wife, whom he finds waiting in front of the hut, what good luck he has had in the far countries. His wife interrupts him proudly, saying: “Nor have I been idle in the meanwhile,” and opens the hut, on whose floor the fisherman sees twelve large dolls representing children asleep. At this point of the drama the performers were interrupted by an outburst of laughter on the part of the audience, a thing which they could not understand. They stared dumfounded at their dear relatives, who had thus far behaved respectably and had listened attentively. The explanation of this laughter lies in the assumption on the part of the audience that the young dramatists know nothing as yet about the origin of children, and were therefore in a position to believe that a wife would actually boast of bearing offspring during the prolonged absence of her husband, and that the