The purpose of this study is to analyze how previous research within behavioral finance describes therelationship between investor behavior, volatility, and short-term price deviations in the stock market.The study is based on three central behavioral finance theories: overconfidence, herd behavior, andprospect theory. To fulfill the purpose of the study, a systematic literature review with qualitativecontent analysis is conducted. Peer-reviewed journal articles were collected through structureddatabase searches in SöderScholar, guided by predefined search strings, inclusion criteria, and acomplementary snowball method. The selected material was analyzed by identifying, categorizing,and comparing how previous research explains the relationship between investor behavior and marketoutcomes such as volatility, mispricing, overreactions, and delayed price adjustments. The findingsshow that investor behavior is frequently described as an important factor behind these marketoutcomes. Previous research suggests that overconfidence, herd behavior, and prospect theory eachcontribute to explaining why stock prices at times move away from fundamental values and whyvolatility may increase under certain market conditions. At the same time, the results indicate thatthese effects are not uniform, but vary depending on market structure, investor type, informationenvironment, and degree of uncertainty. The study therefore contributes to a clearer and moreintegrated understanding of how previous research uses behavioral finance perspectives to explainvolatility, mispricing, and short-term price deviations in the stock market.