When observing others’ behavior, people use Theory of Mind
to infer unobservable beliefs, desires, and intentions. And
when showing what activity one is doing, people will modify
their behavior in order to facilitate more accurate interpretation
and learning by an observer. Here, we present a novel model of
how demonstrators act and observers interpret demonstrations
corresponding to different levels of recursive social reasoning
(i.e. a cognitive hierarchy) grounded in Theory of Mind. Our
model can explain how demonstrators show others how to per-
form a task and makes predictions about how sophisticated ob-
servers can reason about communicative intentions. Addition-
ally, we report an experiment that tests (1) how well an ob-
server can learn from demonstrations that were produced with
the intent to communicate, and (2) how an observer’s interpre-
tation of demonstrations influences their judgments.