Mentalizing in economic decision-making

In the Ultimatum Game, participants typically reject monetary offers they consider unfair even if the alternative is to gain no money at all. In the present study, ERPs were recorded while subjects processed different offers of a proposer. In addition to clearly fair and unfair offers, mid-value offers which cannot be easily classified as fair or unfair and therefore involve more elaborate decision making were analyzed. A fast initial distinction between fair and other kinds of offers was reflected by amplitude of the feedback related negativity (FRN). Mid-value offers were associated with longer RTs, and a larger N350 amplitude. In addition, source analyses revealed a specific involvement of the superior temporal gyrus and the inferior parietal lobule during processing of mid-value offers compared to offers categorized clearly as fair or unfair, suggesting a contribution of mentalizing about the intention of the proposer to the decision making process. Taken together, the present findings support the idea that economic decisions are significantly affected by non-rational factors, trying to narrow the gap between formal theory and the real decisional behaviour. (C) 2008 Elsevier B.V. All rights reserved.