The tendency of people to overestimate the value of their possessions when, say, considering such value for insurance purposes is known in prospect theory as the

A) anchoring effect.
B) endowment effect.
C) status quo bias.
D) confirmation bias.

Endowment Effect

A psychological phenomenon where people ascribe more value to things merely because they own them.

Prospect Theory

A behavioral economic theory that describes how people make decisions under conditions of risk and uncertainty, prioritizing losses differently from gains.