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Profesor Viral Acharya and Colleagues Receive 10,000 Euro Grant

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Viral Acharya, NYU Stern Professor of Finance, with colleagues Paolo Volpin at London Business School and Marco Pagano at Università di Napoli Federico II, received a 10,000 Euro grant from the BNP Paribas Hedge Fund Centre at HEC Paris for their paper, “Seeking Alpha: Excess Risk Taking and Competition for Managerial Talent."

Many people view compensation practices at large, complex financial institutions as a contributing factor to the financial crisis. The authors argue that a key issue is the difficulty of rewarding managers and traders in an efficient way when managers can choose riskier projects with short-term profits (a "fake alpha") and long-term risks, but have the ability to keep moving across firms.