Is there a term for the "I know that you know that I know…" thing? It's a fundamental part of fighting game strategy, particularly the aspect called "yomi", i.e. reading the opponent's intentions so as to preemptively counter them.
[0] https://wiki.mafiascum.net/index.php?title=WIFOM [1] https://m.youtube.com/watch?v=U_eZmEiyTo0