Dilution effect is a social psychology concept regarding judgment bias. It occurs when useful information is overlooked with the presence of irrelevant details.
This term was first used by Richard Nisbett, Henry Zukier, and Ronald Lemley when they found out that research participants tend to focus less on diagnostic information (useful knowledge) in the presence of nondiagnostic information (not relevant knowledge). Particularly, the participants made more extreme judgments about other people without the presence of nondiagnostic information as compared to when both information were presented. This is also observed when choosing products; for instance, when making decisions about the best kind of dishwashing soap, the cleaning efficiency and price are normally considered. However, if other nonconsequential information such as package coloring is presented, the central (and most meaningful) information gets “diluted” and shoppers can be significantly influenced by the color.