Abstract
Humans possess a remarkable ability to understand what is and is not being said by conservational partners. An important class of models hypothesize that listeners decode the intended meaning of an utterance by assuming speakers speak cooperatively, simulating the speaker’s rational choice process and inverting this process for recovering the speaker’s most probable meaning. We investigated whether and how rational simulations of speakers are represented in the listener’s brain, when subjects participated in a referential communication game inside fMRI. In three experiments, we show that listener’s ventromedial prefrontal cortex encodes the probabilistic inference of what a cooperative speaker should say given a communicative goal and context. The listener’s striatum responds to the amount of update on the intended meaning, consistent with inverting a simulated mental model. These findings suggest a neural generative mechanism subserved by the frontal-striatal circuits that underlies our ability to understand communicative and, more generally, social actions.