Cooperation requires common knowledge of mutual preferences, not just shared preferences

Evidence

The assurance needed is notoriously complex. Each needs to know that the other has the AG preference schedule. Moreover, each needs to know that the other knows that he (the first) has that preference schedule. If that is not so, each can conduct, and can replicate, reasoning that will lead him to believe that there is a risk that the other will defect, and hence he will defect himself, Without this knowledge, or something that will stand in for it, the cooperation will unravel. — Diego Gambetta, Trust - Making and Breaking Cooperative…, 105

Categorization

• XREF: This is the classic common-knowledge requirement directly analogous to the observability constraint in Hardin: trust fails without coordination on what each knows. — connects to: Common sense is the shared ground that makes democratic exchange possible