How do i remember that i know you know that i know?

Communication is aided greatly when speakers and listeners take advantage of mutually shared knowledge (i.e., common ground). How such information is represented in memory is not well known. Using a neuropsychological-psycholinguistic approach to real-time language understanding, we investigated the ability to form and use common ground during conversation in memory-impaired participants with hippocampal amnesia. Analyses of amnesics' eye fixations as they interpreted their partner's utterances about a set of objects demonstrated successful use of common ground when the amnesics had immediate access to common-ground information, but dramatic failures when they did not. These findings indicate a clear role for declarative memory in maintenance of common-ground representations. Even when amnesics were successful, however, the eye movement record revealed subtle deficits in resolving potential ambiguity among competing intended referents; this finding suggests that declarative memory may be critical to more basic aspects of the on-line resolution of linguistic ambiguity.