In situations of strategic interaction it is important for agents to consider not only what their rivals will do, but also what they know, what they know about what they know, and so on. Formal models of knowledge have been developed to help us keep track of these levels of knowledge. This paper provides a non-technical introduction to one of these models, and investigates its foundations. It is then shown how the model can be used to analyse game-theoretic solution concepts, in particular Nash equilibrium. Copyright 2002, Oxford University Press.
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