You've just joined the tail end of the serpentine queue of automobiles lined up on a busy road in your city. You don't know for how long the queue stretches ahead of you and neither do you have an idea how long you're going to be held up there. With the whole lot of time to kill you tune in FM radio and watch the rage drivers coercing others into tailgating, speeding, and weaving between lanes right under the very nose of the horde of traffic police that stands there to regulate traffic. With a constant homeostatic balance to achieve in traffic, motorists are impulsive to take care of Number One in this street war zone. Utterly non-caring, opportunistic, people weasel their way with hardly any feelings for fellow human beings. Cows and bulls that stay to the side of the road, nothing stops them from walking in it, crossing it, or taking a nap in it. There inside an auto, children are folded and packed, after careful geometric calculations, until some children in the periphery are not in contact with the vehicle at all... and then their school bags are pushed into the microscopic gaps all round so those minor collisions with other vehicles on the road cause no permanent damage.
The many virtues of culture and religion, real and imagined, are no consolation for the many ugly warts and moles that people display through behavior. Many of the social ills, like the serious lack of concern for fellow human beings or the VIP culture, stem from the attitude, namely the 'I, me and myself' attitude to life, fairness be damned. Motorists that are lined behind their side of the road refuse to keep lined up one behind the other on their side of the road. They jump lanes to right, potentially obstructing traffic that will come from the other side. Initially, a line of vehicles starts building up on both sides of the crossing in an orderly fashion. If both the lines wait calmly in their designated lanes all the vehicles will cross on time.
The testosterone-plagued macho man joins the tail-end of the queue on one side. Too antsy to sit still he notices that the road to his right is fairly empty, though that part of the road is meant for the oncoming traffic. He can't but steer to the right all the way to the front. His strategy is that he'll be the first to squeeze through to the other side in no time. Strangely enough other motorists in the line don't stop this 'assemblage of organic algorithm' from doing that. As he opens a new lane others join him in the line. If nobody on the other side adopts the same strategy he's through, hassle-free. But then those on the other side are no fools. They come from the same stock as this naked ape. They follow his strategy. The resultant logjam is ruinous for all. Even if one motorist jumps the lane demonstration effect leads many others to follow suit. 'Why should I wait longer only to let the other idiot cross over sooner?' 'And why should I cut my nose to spite my face?' The strict enforcement of traffic discipline becomes the important imperative but then that isn't the option available in our world.
Being rational and selfish is more or less the same. For the queue-jumper, this is perfectly rational. So his decision is unquestionable. While he does so he doesn't think he overestimates his rationality though it means he underestimates that of the others. If jumping the queue to minimize his time in it is the best strategy for him, it doesn't perhaps strike his mind that it must be so for others in the queues as well who are equally selfish and rational. As he knew what was the best strategy for him so did others have the mutual knowledge of the best strategy.
As if each of us thought we alone were privy to this strategy and act as if they're unaware that all the others are also aware of the same common knowledge of the best strategy. We all have mutual knowledge that of the best strategy. We don't have the common knowledge that the best strategy is, in fact, the common knowledge. For us to obey simple traffic rules it isn't enough that everyone knows about the rule. Even when all the people know the rule they may not follow it if they don't simultaneously know that all other road users are also aware of it. Everyone is aware of the rule means there is mutual knowledge of it. But everyone being aware that all others know about it too is what constitutes common knowledge. Common knowledge implies that everyone knows and everyone knows that everyone knows.
We all have the mutual knowledge about what is the best for us individually but don't have the common knowledge that what is best for me is also best for all others and that all others know it and that all others know that all others know it. My time is more important than everybody else's time is mutual knowledge but not common knowledge. We hardly (socially) disapprove queue jumping. Ironically enough it's the objector that experiences social disapproval as he often finds his to be the lone dissenting voice. Queue jumpers may or may not be numerous than those objecting to them. Those that are exalted may not be questioned by lesser mortals when they jump the queue. We're too intelligent for our own good. In effect, we use much of our intellect to figure out ways of circumventing laws, regulations, and norms in a bid to twist and turn every available opportunity to our immediate advantage. Plagued with the lack of self-regulation, we're largely reluctant to penalize wrong conduct in others. As we don't feel like following or implementing systems, we instead rear a kind of propensity to look holes in law. This is massaged only if we've got the 'authority' to break rules.