Many event studies only measure a fraction of an event's full value effect because they do not adjust for market anticipation of the event. We present a method based on stock and options prices to measure the full effect that accounts for market anticipation. We apply the method to the passage of Obamacare. Our method estimates the full value effect of Obamacare on the healthcare sector as 55 billion, compared to 16 billion when market anticipation is ignored. The method is applicable to most major events because it only requires that some affected firms have traded stock options.

We examine the effect that an exogenously, specifically governmentally required change in compensation contract had on a managerial decision. We find that a group of mutual funds changed their portfolio risk levels after they were forced to change their performance fee schedules. Their portfolio risk choices differed predictably from a randomly selected group of nonperformance fee funds and a group of performance fee funds that were not required to change their compensation contracts. In addition, the affected mutual funds lost both shareholders and assets around the time of the imposition of the restriction while the other funds exhibited little change or gained assets and shareholders.