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Top-down processing is also known as conceptually-driven processing, since your perceptions are influenced by expectations, existing beliefs, and cognitions. In some cases you are aware of these influences, but in other instances this process occurs without conscious awareness.
Top-down processing can be useful when we are looking for patterns in our environment, but it can also hinder our ability to perceive things in different ways.
Imagine that you are driving down an unfamiliar street and you see a sign for a convenience store. The sign has several missing letters, but you are still able to read it.
Top-down processing suggests that we form our perceptions starting with a larger object, concept, or idea before working our way toward more detailed information. In other words, top-down processing happens when we work from the general to the specific; the big picture to the tiny details. In top-down processing, your abstract impressions can influence the sensory data that you gather.
Because you use top-down processing and rely on your existing knowledge to make an educated guess about what the sign says.