My research will focus on identifying and modeling distorted expectations caused by behavioral biases that influence asset returns. The primary goal is to examine how these biases affect cross-sectional stock returns. Building on recent literature that interprets factor models from a behavioral perspective, I aim to propose a behavioral asset pricing model. This model will investigate how behavioral distortions impact the cross-section of stock returns, providing a more detailed understanding of how biases affect risk premiums and investment outcomes. This work contributes to the literature by developing a new model that integrates key psychological biases, such as overconfidence and representativeness, within the heterogeneous belief framework to better explain cross-sectional stock returns. By incorporating behavioral factors into asset pricing models, my research seeks to uncover the mechanisms driving asset returns. Ultimately, this project aims to enhance our understanding of market dynamics and support the development of more effective investment strategies and policy frameworks.

2025

2026