If you know what I mean: agent-based models for understanding the function of higher-order theory of mind

In everyday life, people often reason about the goals, beliefs, and intentions of others.¬ When you read a book, for example, you make use of this so-called theory of mind to identify with the protagonist, and understand that this person may have goals that are different from your own. People can even take this ability a step further. For example, if Merkel believes that Tsipras believes that Merkel wants to prevent a Grexit, Merkel is using second-order theory of mind by reasoning about the way Tsipras makes use of theory of mind. In this thesis, we use computer models to investigate possible explanations for the origins of human theory of mind reasoning. We simulate interactions between artificial computer players that reason at different levels of theory of mind. This way, we determine in what situations it helps to reason about the goals and beliefs of others.
It turns out that human-like theory of mind is useful across different kinds of situations. Theory of mind can help someone to outsmart his competitors, but also to reach a cooperative solution more quickly. In situations where competition and cooperation become mixed, such as in negotiations, it is especially useful to think about the goals of others, as well as about what others know about your goals.
Because it is so useful across many different settings, it seems that theory of mind is an ability that allows people to live in a complex world, where interactions are sometimes cooperative, sometimes competitive, and sometimes a mixture of the two.