What is the Halo Effect?

The halo effect is a type of cognitive bias. Individuals tend to let their overall impression of a person influence how they see a person's specific traits or characteristics. The halo effect is highly important in business marketing, negotiations, and leadership theory. 

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Academic Research on Halo Effect

• The halo effect: evidence for unconscious alteration of judgments., Nisbett, R. E., & Wilson, T. D. (1977). Journal of personality and social psychology,35(4), 250. This paper suggests the importance of reading, and drawing of inspiration from books and social media. It also proposes different sources for the derivation of knowledge and states that knowledge leads to the betterment of people. It suggests a degree at which someone must search for knowledge, and recommends two sources for inspiration and information.
• Brand equity: thehalo effectmeasure, Leuthesser, L., Kohli, C. S., & Harich, K. R. (1995). European journal of marketing,29(4), 57-66. This paper defines the concept of the halo effect as a systematic bias in attribute ratings resulting from raters tendency to rely on global affect rather than carefully discriminating among conceptually distinct and potentially independent brand attributes. It also discusses how halo measurement can serve as a useful indicator of brand equity. The paper uses consumer rating data in three categories of commonly purchased household products to demonstrate the approach.
•  Unpacking the halo effect: Reputation and crisis management, Timothy Coombs, W., & Holladay, S. J. (2006).Journal of Communication Management,10(2), 123-137. This paper explores the impact of the halo effect on a companys pre reputation prior to crisis. The paper states different ways in which the halo effect can work to protect an organizations image during a crisis, and proposes different strategies for using this systematic tool. The purpose of this paper is to present two studies designed to test if the halo effect could occur and which of the two dynamics of the prior reputation halo best serve to explain the benefits of a favorable, precrisis reputation. 
• The halo effect and technology licensing: The influence of institutional prestige on the licensing of university inventions, Sine, W. D., Shane, S., & Gregorio, D. D. (2003). Management Science,49(4), 478-496. This paper explores the belief by sociologist and organizational theorists that the processes of knowledge creation and distribution are fundamentally social. To back this claim, the paper explores the effect of institutional prestige on university technology licensing. It also examines the influence of university prestige on the annual rate of technology licensing by 102 universities from 1991--1998. The study aims to show that institutional prestige leads to stratification in the creation and distribution of university-generated knowledge. 
• Using a structural model of halo effect to assess perceptual distortion due to affective overtones, Holbrook, M. B. (1983). Journal of Consumer Research,10(2), 247-252. This paper suggests that perceptual distortion due to affective overtones can cause problems for consumer research on evaluative judgments. The paper proposes and illustrates a method for estimating such perceptual biases via a structural model of halo effect. 
• The teamhalo effect: why teams are not blamed for their failures., Naquin, C. E., & Tynan, R. O. (2003).Journal of Applied Psychology,88(2), 332. In this study, the existence of the team halo effect, the phenomenon that teams tend not to be blamed for their failures, is documented. With 2 studies using both real teams and controlled scenarios, the authors found evidence that the nature of the causal attribution processes used to diagnose failure scenarios leads to individuals being more likely to be identified as the cause of team failure than the team as a collective.
• The halo effectin business risk audits: Can strategic risk assessment bias auditor judgment about accounting details?, O'Donnell, E., & Schultz Jr, J. J. (2005). The Accounting Review,80(3), 921-939. This study examines whether the holistic perspective that auditors acquire in making a strategic risk assessment influences the extent to which they adjust account-level risk assessments when they encounter changes in accounts that are inconsistent with information about client operations. The study suggests that the halo effect generated during strategic assessment influences judgment by altering auditor tolerance for inconsistent fluctuations. 
• The halo effectrevisited: Forewarned is not forearmed, Wetzel, C. G., Wilson, T. D., & Kort, J. (1981).Journal of Experimental Social Psychology,17(4), 427-439. The purpose of this research is to determine if forewarning subjects about the halo effect eliminates the effect or makes people aware of its impact. Findings from this paper shows that forewarning and introspection instructions have no impact on subjects awareness of the halo effect. It also shows that subjects liking for an interviewer has minimal effect on their ratings. 
• Influence of training, method, and relationship of the halo effect., Brown, E. M. (1968).Journal of Applied Psychology,52(3), 195. In this paper, a research is carried out on the degree of halo effect of trained Judges and untrained ones. The paper shows that on normal conditions, trained Judges experience less halo effect when compared to untrained Judges, with results being equal on rare occasions. It also shows that judges interaction with an object is one of the primary reasons of higher halo effect on the part of untrained judges. 
• Misunderstanding the nature of company performance: The halo effect and other business delusions, Rosenzweig, P. (2007). California Management Review,49(4), 6-20. This paper explores the degree of errors of popular thinkings in the business world. The paper goes on to propose the halo effect, a tendency to attribute many positive features to successful companies, and to make the opposite attributions when companies falter. The paper aims to dissolve the belief that companies must follow formulas to be successful, by stating that organizations need more than formulas to excel in the financial world. 
• Consumer perceptions of corporate social responsibility: The CSR halo effect, Smith, N. C., Read, D., & Lpez-Rodrguez, S. (2010). This paper investigates the absence of knowledge on the impact of corporate social responsibility (CSR) on consumers. The paper suggests that consumers may well make inferences about company CSR performance on the basis of very limited information, using two studies which provide support for a halo effect within and across domain of a CSR performance in a community. It also highlights the implications if this suggestion were to be the case.