noun
- the act of investing more money or resources in something than is economically justified or prudent
Usage: economics; finance
Examples
- The tech bubble of the 1990s was characterized by massive overinvestment in internet startups with no clear business model.
- Overinvestment in real estate led to the housing crisis when property values collapsed.
- The company's overinvestment in outdated equipment wasted millions of dollars.
- Economists warned that overinvestment in the sector would eventually result in diminishing returns.
- The government's overinvestment in infrastructure projects that lacked proper planning created significant debt.
- Overinvestment by multiple firms in the same market led to fierce competition and reduced profitability.