Belief Updating during Social Interactions: Neural Dynamics and Causal Role of Dorsomedial Prefrontal Cortex

In competitive interactions, humans have to flexibly update their beliefs about another person's intentions in order to adjust their own choice strategy, such as when believing that the other may exploit their cooperativeness. Here we investigate both the neural dynamics and the causal neural substrate of belief updating processes in humans. We used an adapted prisoner's dilemma game in which participants explicitly predicted the coplayer's actions, which allowed us to quantify the prediction error between expected and actual behavior. First, in an EEG experiment, we found a stronger medial frontal negativity (MFN) for negative than positive prediction errors, suggesting that this medial frontal ERP component may encode unexpected defection of the coplayer. The MFN also predicted subsequent belief updating after negative prediction errors. In a second experiment, we used transcranial magnetic stimulation (TMS) to investigate whether the dorsomedial prefrontal cortex (dmPFC) causally implements belief updating after unexpected outcomes. Our results show that dmPFC TMS impaired belief updating and strategic behavioral adjustments after negative prediction errors. Taken together, our findings reveal the time course of the use of prediction errors in social decisions and suggest that the dmPFC plays a crucial role in updating mental representations of others' intentions.