FULL PRODUCT VERSION :
java version "1.8.0_161"
Java(TM) SE Runtime Environment (build 1.8.0_161-b12)
Java HotSpot(TM) 64-Bit Server VM (build 25.161-b12, mixed mode)

A DESCRIPTION OF THE PROBLEM :
The doc for Collectors.reducing() (available at https://docs.oracle.com/javase/8/docs/api/java/util/stream/Collectors.html) contain following example:


     Comparator<Person> byHeight = Comparator.comparing(Person::getHeight);
     Map<City, Person> tallestByCity
         = people.stream().collect(groupingBy(Person::getCity, reducing(BinaryOperator.maxBy(byHeight))));


This sample is incorrect and does not compile.

STEPS TO FOLLOW TO REPRODUCE THE PROBLEM :
Try to compile the code sample below which includes the example given in Java docs.

EXPECTED VERSUS ACTUAL BEHAVIOR :
EXPECTED -
Sample program compiles (and does nothing.)
ACTUAL -
Compilation error:

Main.java:25: error: incompatible types: inference variable R has incompatible bounds
                = people.stream().collect(groupingBy(Person::getCity, reducing(BinaryOperator.maxBy(byHeight))));
                                         ^
    equality constraints: Map<Main.City,Optional<Main.Person>>
    upper bounds: Map<Main.City,Main.Person>,Object
  where R,A,T are type-variables:
    R extends Object declared in method <R,A>collect(Collector<? super T,A,R>)
    A extends Object declared in method <R,A>collect(Collector<? super T,A,R>)
    T extends Object declared in interface Stream
1 error


REPRODUCIBILITY :
This bug can be reproduced always.

---------- BEGIN SOURCE ----------
import java.util.Collections;
import java.util.Comparator;
import java.util.List;
import java.util.Map;
import java.util.function.BinaryOperator;

import static java.util.stream.Collectors.groupingBy;
import static java.util.stream.Collectors.reducing;

public class Main {
    public class City {
        public String Name;
    }

    public class Person {
        public double getHeight() { return 0; }
        public City getCity() { return null; }
    }

    public static void main(String[] args) {
        List<Person> people = Collections.emptyList();

        Comparator<Person> byHeight = Comparator.comparing(Person::getHeight);
        Map<City, Person> tallestByCity
                = people.stream().collect(groupingBy(Person::getCity, reducing(BinaryOperator.maxBy(byHeight))));
    }
}
---------- END SOURCE ----------

CUSTOMER SUBMITTED WORKAROUND :
Replace Map<City, Person> with Map<City, Optional<Person>>