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What is the setting "Allow shared favorites about" ?
What it is:
A global setting that controls if users will be able to share favorite lists.
How it's configured:
Login as an administrator, click "Configuration..." (on the 'welcome' page), expand "Miscellanoues options" and check (enable) the setting "Allow shared favorites".
How it works:
If "Allow shared favorites" is enabled (checked), all registered users will be able to share one or more personal favorite lists among a group of users.
More about that in this FAQ-entry.