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Final copyedit of 5-0
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GlenWeyl committed Mar 20, 2024
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4 changes: 3 additions & 1 deletion contents/english/4-2-association-and-⿻-publics.md
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Expand Up @@ -43,7 +43,9 @@ Therefore in this chapter we will outline a theory of the informational requirem

How do people people form "an organization of persons sharing a common interest"? Clearly a group of people who simply happen to share an interest is insufficient. People can share an interest but have no awareness of each other, or might know each other and have no idea about their shared interest. As social scientists and game theorists have recently emphasized, the collective action implied by "organization" requires a stronger notion of what it is to have an "interest", "belief" or "goal" in common. In the technical terms of these fields, the required state is what they call (approximate) "[common knowledge](https://en.wikipedia.org/wiki/Common_knowledge_(logic))".

To motivate what this means to a game theorist, it may be helpful to consider why simply sharing a belief is insufficient to allow effective common action. Consider a group of people who all happen to speak a common second language, but none are aware that the others do. Given they all speak different first languages, they won't initially be able to communicate easily. Just knowing the language will not do them much good. Instead, what they have to learn is that the *others* also know the language. That is, they must have not just basic knowledge but the "higher-order" knowledge that others know something.
To motivate what this means to a game theorist, it may be helpful to consider why simply sharing a belief is insufficient to allow effective common action. Consider a group of people who all happen to speak a common second language, but none are aware that the others do. Given they all speak different first languages, they won't initially be able to communicate easily. Just knowing the language will not do them much good. Instead, what they have to learn is that the *others* also know the language. That is, they must have not just basic knowledge but the "higher-order" knowledge that others know something.[^Contextcomm]

[^Contextcomm]: That common knowledge is precisely the foundation of context against which communication must optimize is elegantly formally proven by Zachary Wojowicz, "Context and Communication" (2024) at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4765417.

The importance of such higher-order knowledge for collective action is such a truism that it has made its way into folk lore. In the classic Hans Christian Andersen tale of "[The Emperor's New Clothes](https://en.wikipedia.org/wiki/The_Emperor%27s_New_Clothes)", a swindler fools an emperor into believing he has spun him a valuable new outfit, when in fact he has stripped him bare. While his audience all see he is naked, all are equally afraid to remark on it until a child's laughter creates understanding not just that the emperor is naked, but that others appreciate this fact and thus each is safe acknowledging it. Similar effects are familiar from a range of social, economic and political settings:
- Highly visible statements of reassurance are often necessary to stop bank runs, as if everyone thinks others will run, so will they.[^Runs]
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