Delay and Procrastination in Search

We develop a model of sequential search when the cost of searching in each period is stochastic and show that in this setting optimal search entails delay when the cost of searching is high. This characterizes the fact that search activity is often intermittent. Furthermore, we show that if an individual has present-biased preferences this will lead to procrastination, i.e. non-optimal delay that reduces the welfare of the agent. Selfawareness of one’s inclination to procrastinate in the future mitigates the welfare cost of present-bias, but does not eliminate it. Finally, we show that the implications of presentbiased discounting on the likelihood of searching in each period, the reservation price, and the duration of search differ from those of time-consistent discounting.