  We show that there is essentially only one way to construct a stochastic
Schrodinger equation that gives a dynamical account of the transformation of
entangled into factorized states and is consistent both with quantum mechanics
and required symmetries. The noisy, non-linear term is a unimodular scalar
multiple of the time reversal operator that must be present whenever a
Hamiltonian term in the Schrodinger equation can distinguish the factorized
constituents of an entangled state. The dynamical mechanism involved in the
transformation of entangled into factorized states provides an explanation for
the fact that Einstein-Podolsky-Rosen correlations appear in a time determined
by the response of the measuring device and independent of the distance between
the particles. The dependence on the response time of the measuring device may
be testable through a delay in observing the collapse of mesoscopic
``Schrodinger cat" states in ion traps. It is further shown that there are
situations where a two-particle interaction can induce a non-linear term by
virtue of coupling to decay modes that distinguish factorized constituents of
an entangled state. We show that this should happen in the neutral K-meson
system where the entangled $K_L$ state is pushed slightly in the direction of a
factorized constituent ($K_o$ or $\overline{K_o}$) as a consequence of the fact
that these can be distinguished via the sign of the charged lepton in a
semi-leptonic decay mode. The result is a CP violation that is within 20% of
the experimental value.
