Motivated by several industry examples, we study the interaction between a technology provider introducing a new technology and downstream manufacturers adopting the new technology into their products. The manufacturers, once committed to their adoption timing, first cooperate in making...

This paper develops a new approach to explain why risk factors constructed from option returns are priced in the stock market. We decompose an option- based factor into three main components and identify the one responsible for the beta-return relationship. Applying this method to the bear risk...