Common Knowledge

What it is

The definition is formal and the difference it marks is real. Shared knowledge is you and I both knowing something. Common knowledge is you and I both knowing it, each knowing the other knows, each knowing that the other knows that, and so on upwards. Only the second lets either of us rely on the other to act.

Kyle Thomas, Peter DeScioli, Omar Sultan Haque and Steven Pinker tested it in the Journal of Personality and Social Psychology in 2014. Their framing is that psychology has concentrated on altruism, where one person bears a cost to benefit another, and neglected mutualism, where two can benefit each other simultaneously. Coordination is what secures mutual benefit, and common knowledge is what makes coordination safe to attempt.

The experiment holds the information constant and varies only its publicity. Participants chose between working alone for a certain profit and working together for a higher profit received only if their partner made the same choice. Payoffs were broadcast over a loudspeaker, or delivered to both by a messenger, or revealed to each separately. More participants attempted the risky coordination under the loudspeaker.

The authors read this as evidence that people represent common knowledge as its own cognitive category, and extend the account to public protest, performative speech acts and self-conscious emotional expression.

In effect

The consumer application is publicity rather than content. A price rise delivered in an email addressed to you gives you private knowledge. The same rise announced gives you common knowledge, and common knowledge is what makes a coordinated response feel available instead of futile.

Put beside the evidence on price fairness, this suggests something specific. People already believe prices are higher than fair, and corrective explanations barely move that belief. So what a public announcement changes is not what customers think about the price. It changes what they believe about each other.

If that is right, the standard corporate response to a pricing backlash, a detailed account of costs, is aimed at the variable the evidence says is close to immovable, and leaves publicity untouched.

What it does not say

It does not establish anything about boycotts. The 2014 study is a laboratory coordination game with money, a fixed payoff and a single partner whose choice yours depends on. Thousands of strangers acting in loose concert is a different object, and the extension is ours. The authors invoke public protest themselves, which makes it reasonable rather than demonstrated.

It does not measure any commercial outcome. No study here reports cancellations, revenue or churn, so a claim that quiet price rises are commercially effective would be going beyond the evidence.

And the loudspeaker is a stand-in for publicity, not a model of a platform.

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