12 Angry Men : A Behavioral Bias Exercise for Finance Students

Undergraduate investments and portfolio management courses have traditionally prescribed the optimal choices for rational economic man—a creature who does not exist. Real portfolio choices, especially those by retail investors, are made by “normal” people, and normal people exhibit behavioral biases. In this paper, we use a classic play, 12 Angry Men, to help students recognize the biases that have been highlighted in the professional Chartered Financial Analyst curriculum. This approach is engaging, “messy,” and fun, and it has helped my portfolio management students better appreciate the trade-offs that are necessary when putting theory into practice in the real world