Packet Collision is a theoretical concept. In the real world a packet is not a "physical" entity that can collide. Therefore a "collision" is the interference of two radio waves (of the packets being sent).
In NetSim the collision model is as follows -
At the transmitter, when a packet is being transmitted, if the sum of received power from all other nodes is greater than the receiver sensitivity then that packet is marked as collided and the collision counter is incremented.
At the receiver, when a packet is being received, if the sum of the received power from all other nodes, except the node from where this packet is being transmitted, is greater than the receiver sensitivity then that packet is marked as collided, and the collision counter is incremented.
There is also a special case where a Single Packet can be marked as collided as explained below
T1 and T2 are transmitters
R1 and R2 are receivers
NetSim measures the received power at the receiver. If the sum of the Rx power of all other nodes (apart from transmitter) is more than Rx sensitivity then packet is marked as collided. At R2, the receiver sees power for packet being transmitted from T2 - R2, but it also sees power for packet going from T1 to R1. This leads to packet from T2 - R2 being marked as collided.
However, at R1, the receiver sees power for packet going T1 - R1. however, the power for packet going T2 - R2 is too low. Hence packet T1 - R1 is not marked as collided.
A collided packet is discarded and not taken into considered for both link and application throughputs