Abstract
An uncertain chance of irreversibility leads to lower levels of investment than in the reversible case if there is downward irreversibility, higher levels of investment if there is upward irreversibility, and a possible effect in either direction in the case of complete irreversibility. In all of these situations there will be an effect on initial policy investments whenever there is a nonzero probability that the irreversibility constraint is binding. The policy design is based on equating initial marginal costs to conditional marginal benefits over the states in which the initial policy scale decision will be the policy choice. The maximum attainable policy value is convex with respect to the probability of irreversibility.
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