Rational Ritual (2001) offers a profound, game theory-based analysis of the role that rituals, ceremonies and media events play in society. Throughout the ages, these rites have been used to create “common knowledge” that allows people to solve problems such as which ruler to obey and which products to buy. Essential reading for budding Robespierres or Steve Jobses alike.
Imagine you live under a repressive regime – hopefully this is a hypothetical situation for you.
One day, you receive a message that there’s a protest being held against the government. Would you attend?
Your decision will probably depend on whether or not you thought other people would attend: the more people show up, the less likely you are to be arrested or beaten, so you’d be more inclined to go.
This is an example of a coordination problem: a situation where each person’s willingness to participate in a joint action increases if others participate too. In a coordination problem, every person cares about what the other person knows and thinks.
The scale of coordination problems can be seen when we look a little deeper into the protest example, given that every potential protester faces the same dilemma as you, only wanting to participate if others do too.
Therefore in order to make the decision to participate, it’s not enough that a person knows about the invitation. Each person must also know that every other person knows about the invitation. In fact, each person must know that every other person knows that every other person knows, and so forth. Put simply, the invitation must be common knowledge.
A simple way to define common knowledge is through the difference between the CC (carbon copy) and BCC (blind carbon copy) fields in an email message. Everyone whose address is in the CC field will not only receive the message, but also see who else received it, whereas recipients in the BCC field will only receive the message. This is why using CC generates common knowledge: everyone knows what everyone else knows.
As we’ll see in the following blinks, this concept of common knowledge is surprisingly powerful, and can explain a great many phenomena.