IEEE 802.11 wireless LANs use a media access control protocol called Carrier Sense Multiple Access with Collision Avoidance (CSMA/CA). While the name is similar to Ethernet's Carrier Sense Multiple Access with Collision Detection (CSMA/CD), the operating concept is totally different.
WiFi systems are the half duplex shared media configurations, where all stations transmit and receive on the same radio channel. The fundamental problem of a radio system is that a station cannot hear while it is sending, and hence it is impossible to detect a collision. Because of this, the developers of the 802.11 specifications came up with a collision avoidance mechanism called the Distributed Control Function (DCF).
According to DCF, a WiFi station will transmit only when the channel is clear. All transmissions are acknowledged, so if a station does not receive an acknowledgement, it assumes a collision occurred and retries after a random waiting interval.
The incidence of collisions will increase as the traffic increases or in situations where mobile stations cannot hear each other.