Principal outsmarts colluding agents, achieves optimal outcome without collusion.
The article explores how two agents can work together to maximize their profits even when they have different levels of information. By manipulating their reports, they can benefit from sharing information and resources. Surprisingly, the study shows that the principal can still achieve the desired outcome without collusion, thanks to the costs associated with information differences. This means that even if the agents try to collude, the principal can still control the situation and implement a specific quantity plan effectively.