You can't understand society without rejecting the assumption that people are omniscient. But, thinking of narrow thinking as a sort of multiple personality phenomena is an interesting way to frame it:
I develop an approach, which I term narrow thinking, to break the decision-maker’s ability to perfectly coordinate her multiple decisions. For a narrow thinker, different decisions are based on different, non-nested, information. The narrow thinker then makes each decision with an imperfect understanding of the others. Formally, it is as if the decision-maker is a collection of multiple selves playing an incomplete-information game. The friction effectively attenuates the degree of interaction across decisions and can translate into either over- or under-reaction depending on the environment.
Via Marginal Revolution.