Dilution Effect Definition
The dilution effect is a judgment bias in which people underutilize diagnostic information when nondiagnostic information is also present. Diagnostic information is knowledge that is useful in making a particular judgment. Nondiagnostic information is knowledge that is not relevant to the judgment being made. For example, if a medical doctor were making a judgment about a patient’s condition, the patient’s symptoms would be diagnostic information. The doctor might also know the patient’s hair color, but because this information would not be useful in judging the patient’s condition, it would be nondiagnostic.
When both kinds of information are present, people tend to underrely on diagnostic information in making judgments. Thus, the presence of nondiagnos-tic information weakens, or dilutes, the impact of diagnostic information on judgment. The dilution effect results in less-extreme judgments than those made using only diagnostic information.
Dilution Effect Background and History
The term dilution effect was first used by Richard E. Nisbett, Henry Zukier, and Ronald E. Lemley. These scientists observed that when research participants considered both diagnostic and nondiagnostic information, they made less-extreme predictions about other people than when they considered diagnostic information alone. Michael C. Troutman and James Shanteau previously made a similar observation. They referred to the same phenomenon as the nondiagnostic effect. Although Troutman and Shanteau were first to report this judgment bias, it became commonly known by its later name.
The dilution effect conflicts with intuitive knowledge about how human judgment should operate. Logically, when people are given diagnostic information, they should make the same judgment whether or not they have access to nondiagnostic information. For instance, a professor’s prediction of a student’s future academic success should be the same if the professor knows only the student’s grade point average as it would be if the professor knows both the grade point average and the student’s color preference. Logically, color preference has no impact on future academic success. However, the professor is likely to underutilize information about the grade point average if color preference is also known, due to the dilution effect.
Differing explanations have been proposed for why the dilution effect occurs. It may in part be due to people’s failure to distinguish clearly between diagnostic and nondiagnostic information. When people are given information and asked to make a judgment, it is reasonable for them to assume that all of the information they have been given is useful or diagnostic. Thus, they may give both kinds of information equal weight. Although this explanation raises important considerations about how the dilution effect is studied, it is not likely to account for it fully. The ability to distinguish between the two kinds of information does not seem to prevent susceptibility to the dilution effect. Even when people know that some of the information they have is nondiagnostic, it still influences their judgments.
Research relating the dilution effect to stereotyping has yielded information about another possible explanation. It may in part be due to the process by which people categorize others. In making a judgment, people may compare what they know about the person being judged to what they know about the social categories to which that person could belong. The more similar a person is to a category, the more likely that person is to be perceived as belonging to it. Diagnostic information helps in identifying a person’s similarity to a possible category. Conversely, nondiagnostic information can make the person seem distinct from typical members of the category. When nondiagnostic information is present, the person seems less similar to what is known about the possible social category, and thus categorization is weakened.
Importance and Consequences of Dilution Effect
The dilution effect relates importantly to several real-life situations in which individuals must make judgments. It has been observed in a variety of settings and situations. It affects business judgments, consumer behavior, and social categorization.
Studies of financial auditing have indicated that auditors are susceptible to the dilution effect in assessing the risk that an auditee’s records contain misstatements. Auditors’ judgments indicate that they take into consideration nondiagnostic information, such as the auditee’s field of business. This information weakens the effect of diagnostic information, such as previous misstatements in the auditee’s records.
Marketers are aware that providing consumers with nondiagnostic information can decrease the extent to which they judge a product to be beneficial. When a marketing message contains information that is useful in judging a product’s purported benefits as well as irrelevant information, the irrelevant information is likely to dilute the impact of diagnostic information. Consumers’ likelihood of judging the product as beneficial is thereby weakened.
The dilution effect has a positive consequence in relation to stereotypes. In some circumstances, the dilution effect can reduce people’s reliance on stereotypes in forming judgments. Nondiagnostic information can increase the extent to which a person is perceived as an individual rather than as a member of a social category. This occurs because information that is irrelevant to category membership reduces a person’s perceived similarity to members of that category. Perceiving people as individuals can decrease reliance on stereotypes in forming judgments.
However, it would be inaccurate to conclude that the dilution effect is likely to inevitably negate the effects of stereotypes. It has been shown to decrease the impact of stereotypes on judgment under some conditions. Conversely, in other conditions, the dilution effect fails to prevent, or may even enhance, the use of stereotypes.
- Hilton, J. L., & Fein, S. (1989). The role of typical diagnosticity in stereotype-based judgments. Journal of Personality and Social Psychology, 57(2), 201-211.
- Krueger, J., & Rothbart, M. (1988). Use of categorical information and individuating information in making inferences about personality. Journal of Personality and Social Psychology, 55(2), 187-195.
- Nisbett, R. E., Zukier, H., & Lemley, R. E. (1981). The dilution effect: Nondiagnostic information weakens the implications of diagnostic information. Cognitive Psychology, 13, 248-277.
- Troutman, C. M., & Shanteau, J. (1977). Inferences based on nondiagnostic information. Organizational Behavior and Human Performance, 19(1), 43-55.