Neuroeconomics: Chapter 27. Understanding Others: Brain Mechanisms of Theory of Mind and Empathy

While economics and game theory are based on the assumption that people who engage in economic exchange are able to infer other people's motives and beliefs to predict their actions, economists have not yet become interested in the neural mechanisms that enable people to make inferences about other's mental and motivational states. However, the fields of social neuroscience and neuroeconomics have started to investigate our ability to represent others’ intentions and beliefs, referred to as “mentalizing” or “Theory of Mind” (ToM), and to share others' feelings and motivational states, referred to as “empathy”. Following an introduction to the field of social neuroscience, a clarification of concepts and a summary of major findings concerning the neural basis of mentalizing and empathizing are provided. Next, other social emotions closely related to empathy, such as compassion, and social emotions opposing empathy, such as schadenfreude, are introduced. Finally, future research questions are outlined and are discussed in light of their implications for neuroeconomics and human prosociality in general.