overvurdere

Overvurdere is a Norwegian verb meaning to assign a value or importance to something that is higher than warranted; to overestimate or overvalue. The word combines over- (excessively) and vurdere (to assess or evaluate). It can describe situations where someone overestimates a benefit, cost, risk, or the quality of a product, person, or project. The term is common in economics, finance, and everyday language.

In financial and business contexts, overvurdere often refers to overvaluing assets, overestimating future cash flows, or making overly optimistic projections used to justify investments, pricing, or budgets. Cognitive biases such as optimism, confirmation bias, and herd behavior, as well as informational incentives, can contribute to overvurdere. The term appears in analyses, reports, and discussions of market bubbles, valuation models, and risk management.

Consequences of overvurdere include mispricing and overinvestment, leading to budget overruns, delayed projects, or eventual market corrections. Overvaluation can cause capital to be allocated to less productive endeavors and reduce investment returns for investors. In public policy and project appraisal, overvurdere of benefits can inflate cost–benefit analyses and result in suboptimal spending decisions. To address this tendency, analysts emphasize conservative assumptions, uncertainty analysis, and independent review.

Countermeasures include sensitivity analyses, scenario planning, and stress testing; using discount rates that reflect risk and uncertainty; and requiring peer review or external validation. Clear documentation of assumptions helps stakeholders assess whether estimates may be overstated and facilitates more balanced judgments.