Mutual belief is a state in a multi-agent system where all agents believe a proposition P, and all agents also believe that all other agents believe P, but this recursive attribution does not extend to an infinite depth as required for common knowledge. It is a pragmatic, finite approximation essential for enabling coordinated action without the logical paradoxes of infinite regress. In computational terms, it's often modeled as a fixed-point belief structure, typically stopping at the first or second order of recursion (e.g., 'I believe that you believe that I believe P').
