The halo effect is the tendency for one positive trait to spread across the entire judgment of a person or company. System 1 seeks coherence; liking one feature colors everything else.
Kahneman links it to the law of small numbers: we know little but construct a rich, confident image from scraps (wysiati). Interviewers who like a candidate in the first five minutes rarely recover when later answers are weak.
Organizational risk
Performance reviews, hiring, and due diligence all amplify halos. Structured interviews, independent criteria scored before integration, and checklists reduce but do not eliminate it.