Neural processing of observed performance-based errors and rewards in the context of friends and unfamiliar peers across adolescence

Adolescence is characterized by changes in performance monitoring, whereby action outcomes are monitored to subsequently adapt behavior and optimize performance. Observation of performance-based outcomes (i.e., errors and rewards) received by others forms the basis of observational learning. Adolescence is also a period of increasing importance of peers, especially friends, and observing peers forms a crucial aspect of learning in the social context of the classroom. However, to our knowledge, no developmental fMRI studies have examined the neural mechanisms underlying observed performance monitoring of errors and rewards in the context of peers. The current fMRI study investigated the neural correlates of observing performance-based errors and rewards of peers in adolescents aged 9-16 years (N = 80). In the scanner, participants observed either their best friend or an unfamiliar peer play a shooting game resulting in performance-dependent rewards (based on hits) or losses (based on misses, i. e, errors), where outcomes affected both the player and the observing participant. Findings showed higher activation in the bilateral striatum and bilateral anterior insula when adolescents observed peers (i.e., best friend and unfamiliar peer) receive performance-based rewards compared to losses. This might reflect the heightened salience of observed reward processing in the peer context in adolescence. Our results further revealed lower activation in the left temporoparietal junction (TPJ) while adolescents observed the performance-based outcomes (rewards and losses) for their best friend than for an unfamiliar peer. Considering that observation of others' performance-based errors and rewards forms the basis of observational learning, this study provides a crucial first step in understanding and potentially improving adolescent observational learning in the peer context.