In order to study the effect of disposition of investors, who have insensible factors, on stock price volatility, we introduce the capital gains overhang. Based on the GARCH trode vdyne(GARCH-V) model, we introduce the capital gains overhang and establish theGARCH capital gains overhaug(GARCH-V-G) model. The stock indexes on developed market and emerging market are used as samples to conduct a comparative empirical study. It is found that the capital gains overhang is negatively related to price fluctuation on stock markets, which means that the investors with capital gains can weaken the price volatility, while the ones with capital losses can intensify the volatility. Moreover, the capital gains overhang can explain to some extent the persistence of stock price volatility, and the disposition effect shown by investors on emerging markets can explain better and affect greater the continual volatility than that on developed markets. Finally, our study shows that the GARCH-V-G model has better effect than the GARCH-V model.