AbstractWhen vacancies are filled, the job ads often remain, creating phantom vacancies. Older listings more likely represent phantoms. We assume job seekers direct their search based on listing age. Forming a match with an age‐a vacancy creates an age‐a phantom with probability β and generates an externality affecting vacancies aged a and older. Thus, the externality decreases with the match's listing age. Relative to efficient behavior, job seekers overapply to younger listings. We calibrate using U.S. data. The contribution of phantoms to inefficiency is large, but, given their existence, the planner cannot improve much on the directed search allocation.