Often, what matters is not simply what people know, but what they know others know. When something is common knowledge, everyone knows it, everyone knows that everyone knows it, everyone knows that, and so on.
A classic illustration is in The Emperor’s New Clothes: everyone can see that the emperor is naked, but no one wants to be the first to say so, fearing that others will regard them as foolish. Because they aren’t sure that others can see the same thing, everyone continues pretending that the emperor is clothed. Only when a child finally speaks up and the crowd begins repeating the observation does it become common knowledge, allowing everyone to openly challenge the pretense. [...]




