overcompensation (n.)

word-forming element meaning variously "above; highest; across; higher in power or authority; too much; above normal; outer; beyond in time, too long," from Old English ofer (from PIE root *uper "over"). Over and its Germanic relations were widely used as prefixes, and sometimes could be used with negative force. This is rare in Modern English, but compare Gothic ufarmunnon "to forget," ufar-swaran "to swear falsely;" Old English ofercræft "fraud."

In some of its uses, moreover, over is a movable element, which can be prefixed at will to almost any verb or adjective of suitable sense, as freely as an adjective can be placed before a substantive or an adverb before an adjective. [OED]

Among the old words not now existing are Old English oferlufu (Middle English oferlufe), literally "over-love," hence "excessive or immoderate love." Over- in Middle English also could carry a sense of "too little, below normal," as in over-lyght "of too little weight" (c. 1400), overlitel "too small" (mid-14c.), oversmall (mid-13c.), overshort, etc.

late 14c., "action of compensating," from Latin compensationem (nominative compensatio) "a weighing one thing against another, a balancing," noun of action from past participle stem of compensare "to weigh one thing (against another)," thus, "to counterbalance," from com "with, together" (see com-) + pensare, frequentative of pendere "to hang, cause to hang; weigh; pay" (from PIE root *(s)pen-"to draw, stretch, spin").

Meaning "what is given in recompense" is from c. 1600; meaning "amends for loss or damages" is from 1804; meaning "salary, wages" is attested from 1787, American English. The psychological sense is from 1914.