So far, financial researchers have experienced a large number of anomalous phenomena in financial markets, especially in stock market. And standard asset pricing models which assume the existence of rational representative investor have failed to explain many important aspects of asset price behaviors. So the current paper supposes taht there are heterogeneous investors with irrational expectations, and that asset prices are determined by their investment actions and market clearing conditions. Under these assumptions, it is shown the current model can capture a large portion of asset price behaviors for which representative investor models could not have done.