{
  "title": "A Search-Based Theory of Mergers and Acquisitions",
  "publication": "IMF Working Papers, November 14, 2025",
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  "summary": "We develop a search-based theory of mergers and acquisitions with heterogeneous firms and endogenous search complementarities. We use this model to understand how merger incentives and the firm size distribution interact.",
  "sections": [
    {
      "heading": "Core model and objectives",
      "content": "- Develops a search-based theory of mergers and acquisitions with heterogeneous firms and endogenous search complementarities.\n- Uses the model to analyze how merger incentives and the firm size distribution interact.\n- Key model elements: search costs, entry rates, endogenous search complementarities, heterogeneous firms, bargaining."
    },
    {
      "heading": "Equilibrium, dynamics, and analytical results",
      "content": "- In equilibrium, search costs and entry rates determine search intensities and shape the distribution of market power.\n- Derives the law of motion of the firm size distribution.\n- Provides closed-form solutions for aspects of the model.\n- Solves for endogenous search efforts."
    },
    {
      "heading": "Welfare, simulations, and policy analysis",
      "content": "- Derives the aggregate welfare function within the model framework.\n- Uses the framework to simulate the impact of various antitrust policies.\n- Key finding: antitrust policy can have large effects on welfare due to the existence of multiple equilibria."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Econometric analysis, International trade, Labor, Plurilateral trade, Search models, Trade balance, Trade surpluses, Wages\n- Keywords: Bargaining, distribution interact, endogenous search complementarity, IMF working papers, Market power, merger incentive, Mergers & acquisitions, Plurilateral trade, Search, search intensity, Search models, theory of merger, Trade balance, Trade surpluses, Wages\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2025/11/14/a-search-based-theory-of-mergers-and-acquisitions-571856"
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    "Authors: Flavien Moreau, Semih Üslü",
    "Published: November 14, 2025",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798229030601.001",
    "Develops a search-based theory of mergers and acquisitions with heterogeneous firms and endogenous search complementarities.",
    "Uses the model to analyze how merger incentives and the firm size distribution interact.",
    "Key model elements: search costs, entry rates, endogenous search complementarities, heterogeneous firms, bargaining.",
    "In equilibrium, search costs and entry rates determine search intensities and shape the distribution of market power.",
    "Derives the law of motion of the firm size distribution.",
    "Provides closed-form solutions for aspects of the model.",
    "Solves for endogenous search efforts.",
    "Derives the aggregate welfare function within the model framework.",
    "Uses the framework to simulate the impact of various antitrust policies.",
    "Key finding: antitrust policy can have large effects on welfare due to the existence of multiple equilibria.",
    "Subject: Econometric analysis, International trade, Labor, Plurilateral trade, Search models, Trade balance, Trade surpluses, Wages",
    "Keywords: Bargaining, distribution interact, endogenous search complementarity, IMF working papers, Market power, merger incentive, Mergers & acquisitions, Plurilateral trade, Search, search intensity, Search models, theory of merger, Trade balance, Trade surpluses, Wages",
    "**Working Paper**"
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