Abstract
In this chapter, we take a neuroeconomic perspective to explore how the ability to understand mental states of other and predict their behaviour, termed mentalizing, is crucial in value-based social decision-making. These types of choice involve attributing value to social stimuli and motivations in order to inform decisions. Here, (1) we define the concept of value and value-based choice; then, (2) explain the ways in which mentalizing is integrated into the computation of these choices in social interaction. In (3) and (4), we outline the link between mentalizing and social expectations, and how our ability to learn from social interactions and predict behaviour shape our social norms and, therefore, our ability to make optimal decisions in social contexts. To conclude, (5) we analyse how mentalizing allows for flexibility in social expectations and for context-dependent decision-making processes and (6) how individual differences in mentalizing ability help explain variability in social decision-making. Overall, we argue that mentalizing is an essential component of social decision-making and also should be taken into account in applied settings, such as clinical and forensic.
