Uncertain irreversibility, information, and transformation costs

The problem of allocation of a given stock of land between two alternatives uses, preservation and development, is analyzed in a two period model with initial uncertainty about future benefits of those uses and about the irreversibility of development, arrival of information at the end of the first period, and costs of changing the allocation of the resource. It is shown how the consideration of those costs may imply results that do not coincide with the ones presented in the previous literature on irreversibility.