Abstract: In financial market, investors make decisions with the information available. Information heterogeneity and difference in attitudes towards information have a great effect on investors' behavior, and further influence asset pricing. Social network is an important channel for investors to acquire external information, and overconfidence is one impact factor on investors' attitude toward information, both of which affect the asset prices. This paper presents an economic model in which rational traders and overconfident traders have access to information from social network Based on the framework of rational expectation equilibrium and market microstructure, and explore the effect of overconfidence on asset prices. We found that there exists rational expectation equilibrium based on the model the authors build, and derive some significant implications in discussing market factors, such as market efficiency, capital cost and liquidity.