Common knowledge is usually defined as a state in which everyone knows that p, everyone knows that everyone knows that p, and so on, ad infinitum. This definition is usually attributed to David Lewis, despite the fact that his own formulation bears no resemblance to common knowledge as it is usually understood. In this paper, I argue that this concept of common knowledge requires revision. Contrary to usual practice, it turns out to be difficult to model formally because existing models fail to distinguish between full-blown common knowledge and merely finite levels of interactive knowledge. Conceptually, the concept is incompatible with Lewis's intended purpose and obscures the explanatory role played by rational choice models. I propose that the concept of common knowledge be brought better into alignment with Lewis's actual formulation. This reconceptualization of common knowledge suggests a greater focus on explanations that make recourse to the cognitive constraints of real-world agents.

Taking Backward Induction as its running example, this paper explores avenues for a logic of information-driven social action. We use recent results on limit phenomena in knowledge updating and belief revision, procedural rationality, and a ‘Theory of Play’ analyzing how games are played by different agents.

Robert Aumann argues that common knowledge of rationality implies backward induction in finite games of perfect information. I have argued that it does not. A literature now exists in which various formal arguments are offered in support of both positions. This paper argues that Aumann's claim can be justified if knowledge is suitably reinterpreted.

Normative game theory unsatisfactorily explains rational behavior. Real people do not behave as predicted, and what is prescribed as rational behavior is normally unattainable in real-life. The problem is that current normative analysis does not account for people's cognitive limitations – their bounded rationality. However, this paper develops an account of bounded rationality that explains the rationality of more realistic behavior. I focus on the Centipede Game, in which boundedly rational players explore and test others' immediate behavior, until they can apply limited backward induction. The result is that the game has a solution in the form of a subjective Nash equilibrium, which boundedly rational players can possibly realize.

The Story of the Hats is a puzzle in social epistemology. It describes a situation in which a group of rational agents with common priors and common goals seems vulnerable to a Dutch book if they are exposed to different information and make decisions independently. Situations in which this happens involve violations of what might be called the Group-Reflection Principle. As it turns out, the Dutch book is flawed. It is based on the betting interpretation of the subjective probabilities, but ignores the fact that this interpretation disregards strategic considerations that might influence betting behavior. A lesson to be learned concerns the interpretation of probabilities in terms of fair bets and, more generally, the role of strategic considerations in epistemic contexts. Another lesson concerns Group-Reflection, which in its unrestricted form is highly counter-intuitive. We consider how this principle of social epistemology should be re-formulated so as to make it tenable.

This note documents Aumann's reason for omitting the “empty shells” argument for the common prior assumption from the final version of “Correlated Equilibrium as an Expression of Bayesian Rationality.” It then continues to discuss the argument and concludes that rational entities cannot learn their own identity; if they do not know it a priori, they never will.