How do we make decisions? Is it after we have all the information and weighed up all the options? Or are we swayed by what others tell us we should choose? Most of the time, it is probably a combination of the two. As much as we would like to think our decisions are our own, it has been proven that people are more likely to do something if others are doing it too. And no, this isn’t because you are following a trend, but instead, it is an effort to coordinate themselves with others.
This coordination is exhibited by everyone and when problems arise with a decision to coordinate, we use common knowledge to solve them. Common knowledge is generated around us every day and it is useful for you to know how to identify and use it.
In this book summary readers will discover:
- The definitions of coordination problems and common knowledge
- What determines the solving of coordination problems
- How common knowledge is generated
- Strong and weak links
- Maintaining power by preventing common knowledge
Key lesson one: The definitions of coordination problems and common knowledge
To explain what a coordination problem is, it is best to use an example. Imagine you were invited to an event at work. It is not a necessity that you attend so how do you decide if you go? It is most likely probable that your decision will be based on who else is going. The more people from work that decide to attend, the more comfortable you would be and the chances of you going would be higher. So your willingness to attend increases if others participate too. When it comes to coordination problems, everyone cares about what others know and think.
The size of the coordination problem can also be judged if you consider everyone else from work that was invited to the event. Every potential attendee faces the same problem that you do, only wanting to go if they knew others were too. So, the decision to attend is not the invitation but knowing that others have received the invitation as well. Thus, the invitation must be common knowledge. Think of common knowledge as the carbon copy or CC field in emails. Everyone receives the email and knows who else has received it.
Key lesson two: What determines the solving of coordination problems
Whenever it comes to making decisions it always seems like they can go one of two ways depending on which part of our mind we listen to. There is the rational part that makes responsible and mature decisions. Then there is the irrational part that makes poor decisions, often in haste. This happens to everyone and has been pondered since the time of Aristotle.
More interestingly, when considering the brain, people with prefrontal brain damage are unable to make rational decisions in addition to being emotionally unresponsive. This shows that the two are somehow linked. That is why when faced with a coordination problem that seems to be a simple exercise in rational decisions, there are culture-related issues that come into play as well.
This can be explained by considering game theory which states that there are two equilibria meaning that there are two states or strategies that everyone conforms to. Using travel as an example again, you wither travel on the right side or the left. Whichever side it is, travel is safe if no one decides to switch sides. So, how does one choose one of the two? It is simply a matter of common knowledge. If the knowledge is communicated amongst everyone via rituals and societal practices, everyone is aware of what the decision is.
Key lesson three: How common knowledge is generated
Now that you know that common knowledge is an important part of solving coordination problems, it is time to understand how common knowledge is generated. Looking at the government as an example, the only reason people choose to support the government is that others do. In turn, the government uses rituals to create common knowledge supporting their authority. Examples of these rituals can be seen in the royal progress, where royalty travels around their realm making themselves visible to their constituents. More importantly, the crowds that gather all see the same thing thus creating common knowledge. When there are changes in power, there is an accompanying change in the rituals and symbols used. Thus these need to be communicated to the public once again.
This was evident after the French Revolution. They implemented rituals like festivals and even held oath-swearings. The metric system was introduced as new units of measurement and they established that everyone should travel on the right side of the road. The right-hand side was the side that peasants usually used so this change for everyone was a sign of democracy. As people accepted these new regulations and rituals, they also accepted the new regime. This became common knowledge as everyone travelled on the right side of the road -it was visible to all.
In modern times, advertising generates common knowledge. After all, you would be less likely to sign up to a bank if you were their only patron worldwide. And what’s the use of having a phone if you were the only person to have one. Who would you call? Therefore, choosing products and services is also a coordination problem. This is why there are what as known as popular brands. People are comfortable buying things that other people do. Hence, advertising generates common knowledge letting people see the advertisement and know that others are seeing it too. The best venue for such advertisements nowadays is the Super Bowl. The Super Bowl is the most popular regular program on network television and as such, the advertisements during the Super Bowl are specially produced. They are mostly for social goods like clothing, beer and cars and cost a fortune to be aired. Advertisers don’t seem to mind the cost as the advertisements get the job done by generating common knowledge and during a time when they know a large number of people are watching.
Key lesson four: Strong and weak links
In any group, there are both strong and weak links present. Strong links occur between close friends whilst acquaintances share weak links. These links both form networks that are vastly different. Weak links form networks quickly. It’s kind of the same idea as six degrees of connections – anyone can be connected to someone else by six weak links. However, a network of strong links takes much longer to form as all close friends are probably linked already.
This means that knowledge is communicated faster and to more people in a network of weak links as opposed to a network of strong links. Studies have shown that despite this fact, strong links are more important in coordinating action. This contradiction is simply due to strong links being better at generating common knowledge. Weak links may be better for hearing about things but strong links are better at coordinating joint actions.
Key lesson five: Maintaining power by preventing common knowledge
Do you what a panopticon prison is? It refers to the design of the prison whereby there is a central guard station and the cells are arranged in a circle surrounding it. It is a good example to explain how the power lays in the hands of the guards.
There are three characteristics that make a panopticon prison powerful. One, the guards are able to see all the prisoners from their central position. In other words, visibility is centralized and fewer guards are needed. Two, communication and coordination between prisoners are limited as they cannot see each other. Therefore the chances of a riot are slim and third, prisoners cannot see the guards making visibility asymmetrical. The prisoners never know if they are being watched or not so have to constantly assume that they are. Also, if anything were to happen to the guards in the guard station, the prisoners would not be able to see it. If the prisoners could see if anything happened to the guards it would generate common knowledge that they can coordinate their actions to escape or cause a riot.
These three characteristics ensure that the guards remain in power by hindering common knowledge amongst the prisoners.
The key takeaway from Rational Ritual is:
The decisions we make are influenced by the people around us. We are more likely to act, participate or buys something if we know that others are too. This happens to everyone and does mean that you have no choice in what you do. It just means that you are more likely to do something if you have the common knowledge needed to decide. This fact has been utilised by monarchs, governments and advertisers to generate common knowledge and thus influence decisions. It is useful to know how this concept works as we can easily identify it and use it to our advantage when needed.
How can I implement the lessons learned in Rational Ritual:
Common knowledge generation can be a powerful tool to utilise in your business. Be mindful of how your product is advertised and when. You have the potential to build both strong and weak links so use both to your advantage. Weak links will spread the word quickly, but strong links will move people to action. Try your best to stimulate both networks for the best overall results.
