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Running head: LITERATURE REVIEW: THE HALO EFFECT1Literature Review: The Halo EffectAutumn Stern08/11/2019Liberty UniversityBUSI 600-D09Professor Bartholomew
LITERATURE REVIEW: THE HALO EFFECT2AbstractThe purpose of this Literature Review is to research the Halo Effect. The Halo Effect is defined and formed cognitively. It was found that the Halo Effect is present in many different lines of business. It has impactful positive or negative effects; these outcomes are mutually exclusive. Failures, product recalls, and poor customer service cause negative Halo Effects while positive consumer interactions and purchasing experience do the opposite. Halo Effects directly influencean observer's decision making and final choice based on what they already think they know, haveexperienced previously, or are currently observing about a person, act, event, product, or object. Key words: Halo Effect, positive, negative, observer, customer
LITERATURE REVIEW: THE HALO EFFECT3IntroductionThe Halo Effect is a phenomenon that is present in a variety of different areas in and out-side the business world. This includes, but is not limited to, corporate social responsibility, mar-keting, consumer interactions, social media influence, health and nutrition, as well as social in-teractions. The Halo Effect is also present in every line of business, not just a sales heavy envi-ronment or in customer interactions. Some examples of an area in which the Halo Effect is prevalent, but is not at the forefront, is in both hospitality and health or nutritional environments.The definition of the Halo Effect is a “cognitive bias that influences the observer’s im-pression of the person, object, event, or act he or she is observing” (Schindler, 2019, p. 163). It can be inferred from the definition that the Halo Effect is in fact present in multiple areas of life. It is also likely that individuals across the globe experience the Halo Effect or are affected by it on somewhat of a regular basis.The Halo Effect from PsychologyPsychology plays a large role in the Halo Effect, its presence, why it happens, and an in-dividual’s responses to it. While it appears as though the Halo Effect would affect consumers negatively and impact decision making in a negative way, it can actually be found that when there is positive information released to observers, the Halo Effect is likely to be stronger (Gräf, & Unkelbach, 2016). This means that if there were the same amount of negative and positive feedback, observers are most likely to fall to the Halo Effect with a positive impression rather than negative of the person, event, act, or object in question. It seems as though observers want to believe the positive impression over a negative impression, when in reality, observers should show caution when negative feedback is presented.
LITERATURE REVIEW: THE HALO EFFECT4There are a couple of other effects present alongside the Halo Effect; these are observer drift and fatigue. These three principals are not mutually exclusive; one, two, or all three of them can occur together, separately, or in different conglomerates. The observer drift principal appears