Final answer:
The tendency for owners to value their possessions more highly simply because they own them is known as the mere ownership effect. It reflects cognitive biases affecting how individuals perceive value and relate to their belongings.
Step-by-step explanation:
The correct answer to the question is the mere ownership effect. This effect denotes an owner's propensity to appreciate something they own more than if they did not own it. This cognitive bias occurs because possession alone can cause people to value their belongings more highly than they objectively might be worth. This concept echoes broader economic principles that deal with utility and satisfaction in economic analysis, individual value judgments, and the diminishing marginal utility.