Most people think the Halo effect applies only to people. Those people would be mistaken.
The Halo and Devil Effects are another manifestation of the Availability Bias.
If a person has one salient (available) good trait (or bad trait as the case is with the devil effect), his other traits are likely to be judged better than they really are. Interestingly enough, it's been proven that the halo effect applies to more than just people.
Example of the Halo Effect
During an interview, interviewers are too often influenced by comparatively trivial but salient aspects of the interviewee, which in turn affects their judgment of her other characteristics. A psychically attractive interviewee is often judged brighter and more sincere.
Moreover, handsome men and women tend to be rated highly on intellidence, athletic prowess, sense of humor, and so on. When in fact there is little (or no) correlation between these attributes.
The Devil Effect
The opposite of Halo effect is devil effect. The presence in an individual of one salient bad trait, like selfishness, can lower people's opinion of all of his (or her) other traits. All of the sudden our mind starts to think he's dishonest, he's not good at sports, and he's less intelligent than he really is. An extreme example of the devil effect is Stereotypes; where we know nothing about the person but use our quick judging mind to make snap decisions.
More than just people
Both the halo and devil effects apply to more than just people. One of the most extraordinary proofs of the halo effect is found playing blackjack. If in a casino the dealer's first upward card is an ace, any player may “insure”. That is, he makes a side bet of up to 1/2 his original stake. If the dealer gets blackjack the player collects twice the value of his side bet (i.e. his entire original bet) otherwise he loses all of it. It's been shown that unless a player is counting cards the player will lose on average 7.7% of the money put into insurance over time. Willem Wagenaar showed that in a Dutch casino most players sometimes insure and more than 12% always insure. He concluded that the only explanation for this irrational behavior was that the participants were deceived by the name ‘insurance' into thinking that this was the most prudent course of action.
The halo effect refers to a cognitive bias whereby the perception of a particular trait is influenced by the perception of the former traits in a sequence of interpretations. Similar to the primacy error, our mind (using system one thinking — heuristics) makes a quick decision and then all subsequent information is filtered to support that opinion (confirmation bias) as our mind works hard to remain consistent.
Where it all began
Edward L. Thorndike was the first to support the halo effect with empirical research. In a psychology study published in 1920, Thorndike asked commanding officers to rate their soldiers; Thorndike found high cross-correlation between all positive and all negative traits. People seem not to think of other individuals in mixed terms; instead we seem to see each person as roughly good or roughly bad across all categories of measurement.