How the Halo effect makes impressions more extreme

The Halo effect got its name from the halo that you will see around divine persons in old classical paintings. 

In these paintings, the halo radiates light and makes the whole person ‘glow’. The Halo effect describes how you are biased to judge a person’s characteristics that you don’t know, based on the characteristics that you do know. 

Think about politics or pop music or any other famous person: if you either like or dislike something about that person, you are very likely to like or dislike virtually everything about that person; from his or her appearance, character, fashion choices, down to their opinions.

Reducing people to flat characters

The bias lies in the fact that you are simplifying the impression of a person; either everything is good or everything is bad.

The truth is more complex as most people have a spectrum of pleasant and less pleasant characteristics. 

That is what makes us human, interesting and unique! However, our mind has a rather simple worldview in which people can’t be bossy and funny and impolite and generous at the same time.

How does this work in practice? Let’s borrow an example from Daniel Kahneman’s Thinking, Fast and Slow. 

Say you meet a woman, Hannah, at a party, and you find her very nice and easy to talk to. In the next moment, someone asks you whether you think Hannah will contribute to a charity. What will you answer? 

The correct answer is that you don’t have the faintest idea, because there is no evidence that Hannah is generous. 

But you are probably already inclined to say that Hannah is generous. Why? Because you like people who are nice and easy to talk to and you like generous people, so you will associate those traits with the same person.

How the Halo effect can impact you

Think about every time you meet somebody for the first time: a date, job interview, a new colleague, a client.

Once you have made that first impression, people will start to ‘search’ for things that will keep their impression of you consistent. This means it is really important to make the first impression count and make it a positive one, as it will influence all other impressions! 

This also applies to investments and business cases! You may be positively surprised at first by high revenues or a good return, which leads you to discount and ignore all the subsequent risks in the assets that you find. 

At the same time, you will be actively searching for other attractive features of the asset, to confirm your initial impression.

If you are on the other side of the table, you must become aware of the halo effect and try to fight it by actively looking whether traits or opinions that conflict with your first impression might not be true after all! 

This will help you to get a more balanced and less black and white impression of people as well as investment decisions.

Who do you like better?

As a final example, in one experiment people were asked who they liked better:

Julian: intelligent – industrious – impulsive – critical – stubborn – envious

Matthew: envious – stubborn – critical – impulsive – industrious – intelligent 

As they have the same traits, you should like them both equally, but research shows that people actually like Julian better! 

This is because after they read the first two traits, they make up their mind and discount the later traits. An intelligent person that is stubborn should be respected, like Steve Jobs.

But an envious and stubborn person that is also intelligent sounds much more like a dangerous psychopath than a visionary leader!

Mark Reijman is co-founder and managing director of http://www.comparehero.my/ dedicated to increasing financial literacy and help you save time and money by comparing all credit cards, loans and broadband plans in Malaysia.