This error occurs because we haven’t properly pattern matched on the list in our definition of the merge function. In particular, the parentheses are missing. The type here is a list, which means our options are to match on either the empty list, [], or a list with head and tail, (a:as). By omitting the parentheses around a:as, the compiler reads this as an argument, a, followed by a misplaced infix cons (:) operator, rather than considering the : to be part of the list being matched.

Error Message

Example.hs:5:1: error: [GHC-07626] Parse error in pattern: merge
  |
5 | merge a:as (b:bs) rest
  | ^^^^^^^

Example.hs

module Example where

merge [] bs rest = bs ++ rest
merge as [] rest = as ++ rest
merge a:as (b:bs) rest
    | a > b     = merge as (b:bs) (a:rest)
    | otherwise = merge (a:as) bs (b:rest)

module Example where

merge [] bs rest = bs ++ rest
merge as [] rest = as ++ rest
merge (a:as) (b:bs) rest
    | a > b     = merge as (b:bs) (a:rest)
    | otherwise = merge (a:as) bs (b:rest)