Excessive reaction, noise and asset price bubble

According to the actual situation in Chinese stock market, under the hypothesis condition that noise traders have excessive reaction, this paper studies the influence mechanism of noise traders and their excessive reaction to the asset price bubble by Setting up the stock market risk asset pricing models and the asset price bubble. The research results show that noise trader cognitive deviation and its proportion to asset price bubble formation are positive correlation. And the noise trader excessive reaction to asset price bubbles effects are not the same. When the noise traders have excessive reaction on the dividend of mean value, the influence on excessive reaction to asset price bubbles is very limited, but not to further expansion impact of the asset bubble. In contrast, when excessive reaction expand to a certain degree, excessive reaction restrain the bubbles rise. When the noise traders have excessive response on the mean of cognitive dividend mean, noise traders excessive reaction to asset price bubble was a significant positive correlation.