When receiving unfair monetary offers from another person, the most common response is punishment. Existing literature on the UltimatumGameindicates that individuals frequently refuse unfair offers evenwhenthis results in a loss for themselves. Here,wepresent behavioral and neurophysiological evidence demonstrating that friendship substantially modifies this response. When the proposer was a friend rather than an unknown person, unfair offers were less frequently rejected and the medial frontal negativity (MFN) typically associated with unfair offers was reversed to positive polarity. The underlying generators were located in inferior-mesial and right inferior- and medial-lateral frontal regions (BA10 and BA11). These findings highlight the fundamental role of the anterior prefrontal cortex in interpersonal economic interaction and, particularly, present new evidence on the effects of social distance on the MFN.
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