August, 2004

The Importance of Common Knowledge in Postwar Reconstruction

  • Christopher Coyne

    Associate Director, F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics
Key materials
Contact us
To speak with a scholar or learn more on this topic, visit our contact page.

Economic development is a vast topic, both theoretically and historically, and this working paper does not cover all of its nuances ar angles. Nonetheless, it does seek to provide some basic conceptual categories for thinking about the role of media in economic development. In particular this working paper seeks to outline under what conditions the media plays a role in the successful adoption of policies aimed at economic progress. Toward this end, some simple ideas from game theory are applied to a topic that otherwise has This working paper applies a game theoretic argument to the situation of postwar reconstruction. It is argued that widespread coordination characterizes successful postwar efforts. Critical to this outcome is common knowledge among citizens, which allows them to coordinate their activities on conjectures that align with the aims of reconstruction. Here, the nature of common knowledge in the postwar context and its importance in coordinating citizens on reconstruction efforts is analyzed. Historical evidence from German and Japanese cinema and media, effective mechanisms for transmitting common knowledge, serve to illuminate and support these claims. The main conclusion is that common knowledge generation is key to achieving a successful outcome in the postwar situation. Keywords: collective action, postwar reconstruction, common knowledge, culture, ritual, cinema, media JEL Codes: N00, N40 O12, P11received more empirical than theoretical attention.