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 task in which participants explicitly predicted the co-player's actions, which allowed us to quantify the prediction error between expected and actual behaviour. First, in a 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 co-player. 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 behavioural 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. Significance statement For successful social interactions, humans must be able to reliably predict their interaction partners’ actions. Previous research has linked this capacity mainly to posterior regions involved in mentalizing. Here, we show that the prefrontal cortex also plays a crucial role for adjusting our beliefs about others’ cooperativeness as well: Inhibiting the dorsomedial prefrontal cortex with brain stimulation impaired the ability to modify expectations about the interaction partner's willingness to cooperate. Our findings highlight the role of belief updating for strategic social interactions, and identify the dorsomedial prefrontal cortex and its underlying neural dynamics as neural substrate of the ability to successfully learn others’ strategies.