The Winograd Schema Challenge is a general test for Artificial Intelligence, based on problems of pronoun reference resolution. I investigate the semantics and interpretation of Winograd Schemas, concentrating on the original and most famous example. This study suggests that a rich ontology, detailed commonsense knowledge as well as special purpose inference mechanisms are all required to resolve just this one example. The analysis supports the view that a key factor in the interpretation and disambiguation of natural language is the preference for coherence. This preference guides the resolution of co-reference in relation to both explicitly mentioned entities and also implicit entities that are required to form an interpretation of what is being described. I suggest that assumed identity of implicit entities arises from the expectation of coherence and provides a key mechanism that underpins natural language understanding. I also argue that conceptual ontologies can play a decisive role not only in directly determining pronoun references but also in identifying implicit entities and implied relationships that bind together components of a sentence.
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