"Overreaction" means to respond or react in an exaggerated or excessive way to a situation, often in a more intense or extreme manner than is necessary or appropriate. Full definition
The pneumonia is exacerbated by lung inflammation and cell damage caused by overreaction of the innate immune system. (sciencedaily.com)
However, we're always looking to push our contrarian philosophy and find ways to capitalize on overreactions by the public. (sportsinsights.com)
In the May 2016 version of his paper entitled «Abnormal Stock Market Returns Around Peaks in VIX: The Evidence of Investor Overreaction?» (cxoadvisory.com)