CABAL: Multi-Agent Simulacra for Tracing the Effects of Collusive Bidding in Peer Review

Empirical work on algorithmic collusion asks one question of the data: are prices supracompetitive? We show this can be answered "no" by a conspiracy that is nonetheless profitable. Consider bidding agents that couple only through the joint distribution of their unexplained bid components, leaving every agent's own bid law exactly at the competitive law. Any test whose input is a single agent's price or bid history then has power exactly equal to its false-positive rate, for every coupling strength up to comonotonicity. The published detection methodology is therefore blind to this conduct by construction rather than underpowered, and no sample size repairs it. Three empirical results follow. First, the mechanism appears in real language-model agents: twenty models from nineteen independent developers, three deployment prompts each, show residual correlation of $+0.053$ between two deployments of one model against $+0.0001$ across models, with a 95% interval clustered by developer of $[0.030, 0.078]$, under an auditor that sees every order feature and is fitted out of sample. Second, the coupling falls monotonically as sampling temperature rises ($p=0.002$), turning a deployment parameter into a candidate mitigation. Third, on 24 days of Ethereum block-building auction data covering 77,684 bids from 39 bidders, the honest population of bidder pairs is itself so dependent that a screen held at a 5% false-positive rate must sit above a floor of $+0.50$ to $+0.81$, which is 20 to 32 times the family-wise sampling threshold and does not fall as the audit window grows. Since lawful multi-identity operation and conspiracy are behaviourally indistinguishable here, the tractable regulatory target is not detection but counting: resolving 40 bidding identities into 23 operators raises the Herfindahl index by 247.5%, and adding behavioural clusters from public bid streams reaches 324.5%.

Multi-agent systems, where LLM agents communicate through free-form language, enable sophisticated coordination for solving complex cooperative tasks. This surfaces a unique safety problem when a group of agents forms a coalition and colludes to pursue secondary goals and degrade the joint objective. In this paper, we present Colosseum, a framework for auditing LLM agents' collusive behavior in multi-agent settings. We ground how agents cooperate through a formal multi-agent decision-making framework and measure action-based collusive behavior in actions via regret relative to the cooperative optimum and compare it with communication-based collusive behavior. Colosseum enables audits of LLM agents for collusion under benign settings, different coalition objectives, persuasion tactics, and network topologies. We then introduce a new behavioral probe by creating secret communication channels between agents, showing that most out-of-the-box models exhibit a propensity to collude under this probe, which we term emergent collusion. Furthermore, we discover ``collusion on paper'' when agents plan to collude in text but often pick non-collusive actions. Colosseum provides a new way to audit collusion in cooperative multi-agent systems while presenting observations about how collusion emerges, what affects collusion efficacy, and which strategies may mitigate it.

We are entering an era in which individuals and organizations increasingly deploy dedicated AI agents that interact and collaborate with other agents. However, the dynamics of multi-agent collaboration under privacy constraints remain poorly understood. In this work, we present $PAC\text{-}Bench$, a benchmark for systematic evaluation of multi-agent collaboration under privacy constraints. Experiments on $PAC\text{-}Bench$ show that privacy constraints substantially degrade collaboration performance and make outcomes depend more on the initiating agent than the partner. Further analysis reveals that this degradation is driven by recurring coordination breakdowns, including early-stage privacy violations, overly conservative abstraction, and privacy-induced hallucinations. Together, our findings identify privacy-aware multi-agent collaboration as a distinct and unresolved challenge that requires new coordination mechanisms beyond existing agent capabilities.