In a series of studies, subjects were asked to make predictions about target individuals. Some subjects were given information about the target which pretest subjects had judged to be "diagnostic''-that is, had judged to be usefully predictive of the outcome. Other subjects were given a mix of information judged to be diagnostic and information judged to be "nondiagnostic" by pretest subjectsthat is, judged to be of little value for predicting the outcome. Subjects given mixed information made much less extreme predictions than did subjects given only diagnostic information. It was argued that this "dilution effect" occurs because people make predictions by making simple similarity judgments. That is, they compare the information they have about the target with their conception of outcome categories. The presence of individuating but nondiagnostic information about the target reduces the similarity between the target and those outcomes that are suggested by the diagnostic information. One of the major implications is that stereotypes and other "social knowledge structures" may be applied primarily to abstract, undifferentiated individuals and groups and may be largely set aside when judgments are made about concrete, individuated people.