Intro. [Recording date: September 2, 2025.]
Russ Roberts: Welcome to September 2nd, 2025. Today, Iâm joined by renowned cognitive psychologist and author Steven Pinker, who holds the Johnstone Family Professorship at Harvard University. Weâll be discussing his latest work, When Everyone Knows That Everyone Knows…: Common Knowledge and the Mysteries of Money, Power, and Everyday Life. Steven, great to have you on EconTalk.
Steven Pinker: Thank you for having me.
Russ Roberts: The core concept of your book revolves around ‘common knowledge.’ While it has an everyday interpretation, you also delve into a more complex, technical understanding. Could you clarify what you mean by ‘common knowledge’?
Steven Pinker: Common knowledge is a state where A knows something, B knows it, A knows that B knows it, B knows that A knows it, and so forth, infinitely. Itâs a recursive understanding.
Russ Roberts: The book attempts to tackle the feasibility of this concept at its deepest level. Can you elaborate on whether the assumption of common knowledge is realistic, and if so, why that matters?
Steven Pinker: As a cognitive psychologist, my focus isnât on logic or game theory, but I do ponder what happens inside a person’s mind when they possess common knowledge. It seems implausible to think one could hold an infinite sequence of ‘I know that she knows’ in their head. Instead, I believe we often just recognize something as being public or self-evident. If two people observe something together, that shared observation suffices to create common knowledge, as they see each other seeing what is known.
Russ Roberts: You illustrate this with the example of people observing an event together, where the challenge lies in the fact that even if we hear the same information, we might process it differently. Our perceptions can differ dramatically.
Steven Pinker: Absolutely. Public events often foster common knowledge intentionally, such as weddings where everyone recognizes the coupleâs commitment. However, misinterpretations can arise, not just about the event itself but also about who else is aware of it.
Russ Roberts: Much of your book discusses coordination versus cooperation, emphasizing that common knowledge is crucial for coordination. Can you explain why coordination is unique and the role of common knowledge in it?
Steven Pinker: Cooperation typically involves mutual aid between two parties, each incurring costs to benefit the other. This concept was notably highlighted in Richard Dawkins’s The Selfish Gene, posing a dilemma for evolutionary biology: how could altruism evolve if natural selection typically favors self-interest? This conundrum is likewise prevalent in classical economics.
There are various explanations for cooperation, such as reciprocity and trade of favors. However, coordination, which allows individuals to act together for mutual benefit without incurring costs, often goes unnoticed. For instance, when two people bring complementary dishes to a potluck, they both gain without anyone losing. The challenge lies in ensuring that both parties make the same choices, which often boils down to public signals or focal points that facilitate coordination.
Russ Roberts: You mention Thomas Schellingâs classic example of a couple trying to meet in New York without a cell phoneâhow does this illustrate coordination problems?
Steven Pinker: The coupleâs dilemma reflects the essence of coordination. They might think of various locations, each assuming the other has different preferences. Without clear communication, they risk missing each other entirely, demonstrating the critical role of common knowledge in such situations.
Russ Roberts: This challenge of coordination can lead to humorous complications in relationships, as you mentioned earlier. It highlights the multi-layered nature of understanding and miscommunication.
Steven Pinker: Indeed, the depth of mental processing involved in knowing what others know can lead to amusing misunderstandings, often portrayed brilliantly in fiction where the plot hinges on these complexities.
Russ Roberts: Youâve elucidated the distinction between cooperation and coordination remarkably well. But what about the societal frameworks and norms that help us navigate these challenges?
Steven Pinker: These norms are vital because they embody common knowledge. They function on the premise that everyone is aware they exist and can unravel if disregarded. In the case of the Tragedy of the Commons, for instance, communities often establish norms that mitigate over-exploitation of shared resources.
Moreover, these norms can be reinforced through social mechanisms like gossip or community disapproval, underscoring the importance of public awareness in maintaining cooperation.
Russ Roberts: The Apple Super Bowl advertisement you mentioned serves as a fascinating example of how common knowledge can influence consumer behavior. Would you elaborate on that?
Steven Pinker: The 1984 Super Bowl ad aimed to generate common knowledge by showcasing that many viewers were simultaneously watching it. This public acknowledgment would encourage individuals to purchase a Macintosh, mitigating the fear of being the only one with the product.
Russ Roberts: Such advertisements are intriguing in their ability to create a sense of community among consumers. However, common knowledge has broader implications in various social dynamics, including religious practices and community norms.
Steven Pinker: Precisely. The implicit understanding that a higher authority is observing can foster compliance and cooperation among individuals. This dynamic is often observed in religious contexts, where the presence of an omniscient deity can function as a societal glue, encouraging adherence to communal norms.
Russ Roberts: The use of informants in totalitarian regimes also highlights the complex interplay of power and compliance. The fear of being watched can create a culture of mistrust and conformity.
Steven Pinker: Exactly. This informant culture can suppress dissent and stifle creativity, as individuals become wary of expressing thoughts that might be reported. The irony is that in more open societies, similar dynamics can emerge through social pressures and norms.
Russ Roberts: Humor often plays a significant role in navigating societal pressures. It’s a fascinating lens through which to understand human relationships and dynamics.
Steven Pinker: Humor serves as a powerful common knowledge generator, highlighting shared experiences and vulnerabilities. It reflects our collective understanding of social norms and often provides a safe outlet for addressing discomfort.
Russ Roberts: The contagiousness of laughter and crying underscores our interconnectedness as social beings. These reactions can evoke not only personal responses but also collective experiences.
Steven Pinker: Indeed, laughter and tears bridge individual experiences with shared moments. They transform private emotions into communal expressions, reinforcing societal bonds.
