Category: General Knowledge | Last updated: 2026-09-18
A person is given a coffee mug as a gift. Even though they wouldn't have paid more than $5 for a similar mug in a store, they now value this specific mug at $15 because it belongs to them. This phenomenon illustrates which cognitive bias?
A) Sunk Cost Fallacy
B) Endowment Effect
C) Dunning-Kruger Effect
D) Confirmation Bias
Explanation
The Endowment Effect describes the tendency for people to ascribe more value to things merely because they own them, regardless of their objective market value.