Common knowledge of mutual confidence makes a focal point self-sustaining

Evidence

And, if the Nash point appeals to us powerfully in the bargaining game, it must do so because we are confident that it appeals equally to our partner who in turn we believe to be aware that our views coincide. It must therefore appeal to us in the pure coordination game as a unique point that the partner will consider to be obviously obvious. — Thomas C. Schelling, The Strategy of Conflict, 667

Categorization

• XREF: Common-knowledge-of-common-knowledge — the reader’s Schellingian credible-commitment reading of hostage mechanics in the Mafia. — connects to: Optimism about others’ trustworthiness is self-reinforcing through gained experience; Trust relationships self-maintain once the parties recognize mutual benefit; Reciprocal trust creates mutual incentives for trustworthiness — Nicolas Baumard, A mutualistic approach to morality: The…, 166 (+2 more)

Related

• Complementary agreements are self-enforcing through interdependence and focal points (similarity 0.82)
• Optimism about others’ trustworthiness is self-reinforcing through gained experience (similarity 0.82)
• Trust requires time for repeated interactions and is a cognitive capacity (similarity 0.80)
• Repeated-interaction gains let trust outweigh distrust despite occasional great losses (similarity 0.80)
• Cost-driven market ties evolve into trust-laden partnerships over time (similarity 0.79)
• Reciprocity motivations can be self-reinforcing where further interactions are plentiful (similarity 0.79)
• Trustworthiness persists only while future gains from the relationship outweigh defection (similarity 0.79)
• Hostages and shared vulnerability render agreements self-enforcing (similarity 0.79)
• Trust relationships self-maintain once the parties recognize mutual benefit (similarity 0.79)
• Repeated interaction transforms the incentives of a one-way trust game (similarity 0.79)
• Chronic mutual distrust in protection markets requires unambiguous commitment markers (similarity 0.78)

Broader Connections

• Trust relationships self-maintain once the parties recognize mutual benefit #corroborates (0.85)
• Reciprocal trust creates mutual incentives for trustworthiness #corroborates (0.82) — Nicolas Baumard, A mutualistic approach to morality, 166
• Optimism about others’ trustworthiness is self-reinforcing through gained experience #expands (0.80)
• Distrust is self-reinforcing because it starves itself of corrective information #complicates (0.80)