The Analytic Method of Ronald Coase: Lessons for Research on Mergers and Acquisitions

Nobel Laureate Ronald Coase championed realism in economic modeling. In this paper, I draw lessons from the analytic method of Coase for research on mergers and acquisitions. With a new sample of takeover auctions, I support my premise that a deeper understanding of the takeover process leads to a more accurate measurement of the valuation effects of mergers and acquisitions. I also discuss several topics for future research that can benefit from the method used by Coase