| Summary: | The neural correlates of rejection in bargaining situations when proposing a fair or unfair offer are not yet well understood. We measured neural responses to rejection and acceptance of monetary offers with event-related potentials (ERPs) in mid-adolescents (14-17 years) and early adults (19-24 years). Participants played multiple rounds of the Ultimatum Game as proposers, dividing coins between themselves and a second player (responder) by making a choice between an unfair distribution (7 coins for proposer and 3 for responder; 7/3) and one of two alternatives: a fair distribution (5/5) or a hyperfair distribution (3/7). Participants mostly made fair offers (5/5) when the alternative was unfair (7/3), but made mostly unfair offers (7/3) when the alternative was hyperfair (3/7). When participants' fair offers (5/5; alternative was 7/3) were rejected this was associated with a larger Medial Frontal Negativity (MFN) compared to acceptance of fair offers and rejection of unfair offers (7/3; alternative was 3/7). Also, the MFN was smaller after acceptance of unfair offers (7/3) compared to rejection. These neural responses did not differ between adults and mid-adolescents, suggesting that the MFN reacts as a neural alarm system to social prediction errors which is already prevalent during adolescence.
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