The halo effect is a pernicious cognitive bias which distorts our judgment and decision making, especially as it concerns people or organizations. Its essence is that a positive overall evaluation distorts any evaluation of specific attributes. The reverse of the halo effect is the devil effect, when an overall negative evaluation leads us to underrate specific attributes.
Global Evaluations Trump Specific Evaluations
In their 1977 study on the halo effect, Richard Nisbett and Timothy Wilson showed that our global evaluations override our specific evaluations. This classic study followed on the ancient realization that if we love someone, then we love everything about him or her, and if we hate someone, then we hate everything about him or her. The study, however, also revealed that our global evaluations override specific evaluations even in less extreme situations than love or hate.
Nisbett and Wilson asked college students to watch a videotaped interview with a psychology instructor. The instructor was a native Belgian with a pronounced French accent. Some students saw an interview in which the instructor appeared warm and likable so as to create a positive overall impression. Others, however, saw an interview in which he appeared cold and unlikable, so that the subjects would form a negative overall impression. The subjects then rated his overall likability and evaluated his specific traits, such as physical appearance, mannerisms, and accent. The results showed that if the subjects liked him overall, they also liked his appearance, mannerisms, and his French accent. Yet, if they had a negative overall impression, they also all disliked his other traits, no exception being made to his French accent.
The Halo Effect in Business and Life
The halo effect most obviously distorts our evaluations of other people’s advice or expertise. So, for example, if we have a good overall impression about a particular person, we are likely to overrate his specific advice or expertise even if it is poor; conversely, if we have a negative overall impression about the same person, we are likely to underrate his otherwise good advice.
The halo effect, however, it is not limited to our judgments of other people—it has unlimited jurisdiction over all sorts of evaluations, from appraisals of promising business ideas to strategic policy decisions.
The halo effect is pernicious in business, and it also drives most of the advice in bestselling business books. Phil Rozensweig detailed this sad state of affairs in his book The Halo Effect: … and the Eight Other Business Delusions That Deceive Managers. For example, when a company’s stock rises, we get a positive overall impression, even though the good stock performance may be due to some random factors. The halo effect will distort our specific evaluations, so we will think that this company must have a unique vision, a powerful leadership, a solid competitive strategy, a great corporate culture, and so on. Business writers will then enthusiastically explain what makes this company exceptional, and why everyone should do as they do.
Minimizing the Halo Effect
The halo effect is part of our automatic, intuitive, unconscious thinking (which is often called hot cognition or System 1, as opposed to more deliberative thinking system usually referred to as cold cognition or System 2). Therefore, anything that minimizes our reliance on automatic thinking and increases our reliance on analytic and systemic thinking will also minimize the halo effect.
- Mental Energy. Try to make sure that you have enough mental energy when you’re making your evaluations, because lack of mental energy noticeable increases reliance on automatic processing.
- Avoiding Good Mood. Avoid making judgments when you’re in a good mood, because good mood uses up cognitive resources and increases the reliance on stereotypes, including the halo effect. A 2011 study by Joe Forgas found that people in a negative mood were notably less swayed by the halo effect.
- Increasing Cognitive Strain. The more difficult it is to process information, the more likely we are to turn on analytic thinking system, so we can minimize the halo effect by increasing cognitive strain, such as reading a text in a difficult to read font.
 Richard E. Nisbett and Timothy DeCamp Wilson, The Halo Effect: Evidence for Unconscious Alteration of Judgments, Journal of Personality and Social Psychology, 35, 250-256 (1977).
 Phil Rosenzweig, The Halo Effect: . . . and the Eight Other Business Delusions That Deceive Managers (Free Press, 2007)
 Joseph P. Forgas, She Just Doesn’t Look Like a Philosopher…? Affective Influences on the Halo Effect in Impression Formation, European Journal of Social Psychology, 41, 812–817 (2011).