NEW YORK (AP) _ Columbia Business School's decision to scrap a $100,000 prize offered by prominent takeover strategist Asher B. Edelman has been hailed by academic officials, but they acknowledge the incident raises troubling questions about business schools and whether students are obsessed with greed.

Edelman, who teaches a popular new class at Columbia on corporate takeovers, had offered the prize to any student who could find him a good takeover target. Although the idea excited the students, school dean John C. Burton voided it Tuesday.

Professors at other business schools said Wednesday they strongly agreed with Burton's decision, rejecting Edelman's argument that the prize would instill a sense of entrepreneurship that students needed in the real world.

''If it's only the real world we want to replicate in the academy, then the best thing to do is let people loose to live in it,'' said Lawrence G. Lavengood, professor of policy and environment at Northwestern University's Kellogg School of Management.

Richard R. West, dean of New York University's graduate business school, said such a prize violated conflict-of-interest principles that apply to Edelman and the students. Had the prize been allowed, he said, it would have made a mockery of the ethics that business schools claim to instill and uphold.

''The whole thing is appalling to me,'' he said. ''Business schools have worked damn hard to worry about values. These incidents make us look like a bunch of damn fools. I don't fault Columbia. They handled it correctly.''

West also said he was disturbed by what he called the apparent inability of Edelman and some of the students to understand why the $100,000 prize was improper.

''It's crucial that schools do their best to teach students not to think about just making money,'' West said. ''It may be that some students in our schools may want to sell their souls to the devil. But we should not have the devil standing at the front of the classroom.''

Many business schools, including Columbia and NYU, offer students competitive grants of up to $5,000 if they devise business start-up plans that eventually succeed. It usually is understood, however, that the winners will repay the money into a school fund that can be used to award others.

In an interview Wednesday with Cable News Network, Edelman said his prize would ensure students were compensated if he used one of their ideas, and would remove them from ''strictly the academic side of the business world.''

His academic critics said Edelman actually was asking the students to work for him, an improper relationship in an academic setting.

Roy Herberger, dean of the Cox School of Business at Southern Methodist University, said that if Edelman had offered the money to the Columbia school as a whole, it might have been considered acceptable.

''I quarrel with the notion of how it was set up,'' Herberger said. ''The motive for the students has to be the learning function, not a dollar figure. They've got plenty of time to do that when they're in the workplace. Edelman is off base if he doesn't make the distinction.''

Curtis W. Tarr, dean of Cornell University's Johnson School of Management, said the allure of $100,000 could make students think they should learn only what will compensate them.

''You can see how students, to the disadvantage of everthing else in the school, would be absolutely warped by that,'' Tarr said.

David Vogel, professor at the University of California-Berkeley business school, said Edelman's reward offer was an abuse of the students, whether they liked the idea or not.

''If he wants to hire people who go out and do stuff for him, he has every right,'' Vogel said. ''That's different than using his privileged access with his students to get a competitive advantage over others. That's an abuse of the role. I think he should be fired.''

Well-known for his lucrative takeover forays, Edelman was invited to teach at Columbia as part of the school's effort to recruit highly visible figures from the business world.

Edelman disclosed to the class last month that students would be required in the final examination to select a takeover target and explain their choice. If a selection was useful to Edelman, he said, he would give the student a $100,000 finder's fee.

Other Columbia faculty members were upset by the offer, and Burton ordered it rescinded after talking with Edelman. The investor first refused to renege on the prize but backed down when the school threatened to cancel his class.