Updated: Aug 20, 2021

In economics, a model of the optimal decision-making of an agent facing a choice of options with random pay-offs when delay is costly. In this setting an agent is confronted with a trade-off between the cost of delaying the choice and a potential opportunity of a better option arriving in the future. The most common applications of search theory include job search in labour economics and product search in consumer theory. See also reservation wage.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.