Optimal collusion-proof contracts reshape game theory in asymmetric information scenarios.
The article explores how collusion can happen in situations where some parties have more information than others. By looking at different scenarios, the researchers found that certain contract designs can prevent collusion from occurring. They discovered that when collusion happens before accepting an offer, the best contract is still effective even with collusion. However, if collusion happens after sharing information, a different type of contract is needed to prevent collusion. This contract needs to be unequal in terms of payments and quantities to be effective against collusion.