An applicant is not required to perform a search when applying for a patent.  Under what circumstances might an applicant choose to do so, or not to do so?  Individuals, small entities and large entities may well face different circumstances, and arrive at decisions accordingly.  Does the decision affect the patent application?
Individual inventors generally lack large amounts of funding.  An invention search or a patentability search can reveal a representative sample of what is out there in the patent landscape.  Knowing this, an inventor can decide whether or not to spend money to pursue a patent application.  Of course, no search can ever be 100% certain to reveal art that could jeopardize the chances of a patent application proceeding to grant or that could, during prosecution of the patent application, narrow the claims beyond what would be acceptable to the inventor.  Still, proceeding with eyes open may be a prudent course for the individual inventor.  This is one upside of searching.
Many companies, especially large corporations, have in-house counsel that specifically instructs everyone involved in the patent application process, from inventors through management, in-house practitioners and outside practitioners, to not search.  Applicants for a patent, and their representatives, are under a duty of disclosure, which includes a duty to disclose to the United States Patent and Trademark Office all information known to that individual to be material to patentability as defined in 37 CFR §1.56, which duty may be satisfied by the filing of an Information Disclosure Form under 37 CFR §1.97.  One of the downsides of searching is that art found during searching may fall under this requirement.  Another downside of searching is that, if a granted patent on which a product made or sold by the company could infringe becomes known to anyone working for the company, the company may be liable for willful infringement.  Companies generally prefer to not have such liability, thus the frequent decision to not search.
A downside of not searching is vulnerability to personal blind spots in the patent landscape.  This may affect claims drafting.  However, the inventor is often very knowledgeable about the state-of-the-art.  When deciding how best to position claims, and what the claim scope should be, it is wise to listen to the inventor(s).
Often, as well, experience in patenting fills in such blind spots to a great degree.  The more work a practitioner does for a particular client, or in an area in technology, the more knowledgeable the practitioner becomes about the relevant art.  One develops a feel, or instinct, about how and where to position claims.  Of course, even if an examiner finds really close art, claims can be amended during prosecution.  Claims as originally filed in a patent application occasionally get granted (without amendment), leaving us to wonder whether the claims could have been broader.  Skill developed by amending and arguing claims adds to the above-described feel or instinct.  So, press on, be bold when claiming, and don’t be discouraged by surprises from examiners, who are working hard to ensure the validity of patents when issued.  It’s all part of the art of patenting.