When phenomena in quantum mechanics are interpreted from the perspective of bio-psychology, wave function collapse from several to a single eigenstate must be plausibly explained. Quantum mechanics requires a context, yet the context of an observer is rarely considered. On the other hand, in bio-psychology, the observer context is examined to explain superposition and collapse by different mental functions used in everyday life. Three mental functions are described, one of which is responsible for observation, and the others for conservation and treatment of information in mental representation. Whereas observation produces information with certainty, the subsequent processes result in uncertain potentiality. In order to encompass uncertainty, multiple possibilities are simultaneously considered in mental superposition, one of which should represent the unknown future outcome. During observation, all suggested potentialities necessarily collapse to one real outcome. The collapse of superposition does not occur in observable physical reality, but in its mental representation. Some physical principles—such as superposition, infinity and nothingness before the Big Bang—are pure phenomena of mental representation, which will always remain unverifiable by observation. This argument proves that mental representation brought about by the observer context participates in the production of mental models for the best approximation of physical reality.