Language use in conversation is fundamentally incremental, and is guided by the
representations that interlocutors maintain of each other’s knowledge and beliefs. While
there is a consensus that interlocutors represent the perspective of others, three
candidate models, a Perspective-Adjustment model, an Anticipation-Integration model, and
a Constraint-Based model, make conflicting predictions about the role of perspective
information during on-line language processing. Here we review psycholinguistic evidence
for incrementality in language processing, and the recent methodological advance that
has fostered its investigation—the use of eye-tracking in the visual world paradigm. We
present visual world studies of perspective-taking, and evaluate each model's account of
the data. We argue for a Constraint-Based view in which perspective is one of multiple
probabilistic constraints that guide language processing decisions. Addressees combine
knowledge of a speaker’s perspective with rich information from the discourse context to
arrive at an interpretation of what was said. Understanding how these sources of
information combine to influence interpretation requires careful consideration of how
perspective representations were established, and how they are relevant to the
communicative context.