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Reaction mechanism for the formation of olefin-containing unsaturated bicyclic lactone in the presence of olefin or allyl alcohol (intermolecular). (i) C–H activation, (ii) olefin 1,2-insertion, (iii) β-hydride elimination, (iv) reductive elimination followed by reoxidation by Ag(I) to form Pd(II), (v) allyl C–H activation, (vi) β-hydride elimination, (vii) oxypalladation, (viii) β-hydride elimination, (ix) reductive elimination, (x) reoxidation.

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