Its when you respond to either irony or sarcasm with more irony or sarcasm, respectively. More commonly referred to as “playing along.” Double humor, however is more specific than playing along because it may be without the knowledge or consent of one or more parties involved in the “double joke.”
Harry: Amanda, why are you such a whore?!?!?!?
Amanda: Because I like sleeping around!!!
Harry: But that could get you infected with many STD’s!
Amanda: What? …
Harry: That's double humor.