Economics Research Institute Study Paper
Utah State University Department of Economics
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The Arrow-Fisher-Henry (AFH) analysis of land development under uncertainty has been conducted in a two-period model. Recently, Capozza and Helsley in 1990 and Batabyal in 1995 have addressed the question of land development under uncertainty in a many-period setting. In this paper, I extend aspects of this literature by analyzing the land development question in a Markov decision theoretic framework. Inter alia, I show that the timing of land development is invariant to the manner in which a landowner uses information about the consequences of development.
Batabyal, Amitrajeet A., "The Timing of Land Development: An Invariance Result" (1996). Economic Research Institute Study Papers. Paper 100.