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yeah!! this means that people just act as if the joke is genuinely interesting. It helps at instances where you don't want to embarrass the person who told that joke. that may seem like howling of wolfs though (which i think may embarrass him more if he is discovers the fact )
Can you please clarify the following sentences which is about " laughter"?
When a group of people laugh, sometimes, at the expense of outsiders,they show solidarity and togetherness not unlike a howling pack of wolves.
It is comparing human behaviour with the pack behaviour of wolves - a group laughing together may seem to a non-member to be a group who are deliberately excluding that person.