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.

XREF: This is the classic game theory concept of common knowledge (Lewis/Schelling), closely tied to the iterated prisoner's dilemma and coordination games.

Diego Gambetta, Trust - Making and Breaking…, loc. 105