Group membership and stereotype content jointly affect neural processing during resource allocation decisions.

Both stereotypes and in/outgroup categories affect judgment and decision making, but while the former reflect socially learned generalizations about other people's characteristics, the latter specify relationships with whom it is safe to affiliate. With neuroimaging data we substantiate these distinct functions and explore how their underlying neural correlates interact to influence behavioral biases. Participants in the MRI scanner are asked to share money with recipients who are stereotyped along a warm/cold dimension and who belong either to a (minimally defined) in- or outgroup. Whole-brain univariate analyses reveal that colder stereotypes become increasingly salient when perceived groups, with heightened activity in amygdala, anterior insula, and ACC. Activation in the latter furthermore predicts decreased tendency to share with cold outgroup recipients, while rLPFC appears to mitigate this. ROI-based multivariate pattern analyses of the data indicate that, during early perceptual processing, only group membership is represented in the amygdala, while during decision making the orbitofrontal cortex represents both groups and stereotypes in such a way that outgroups amplify the dissimilarity between warm/cold traits. Together these results suggest that outgroups are a moderator of stereotypical reasoning with the potential to polarize, but that actual biased behavior depends on the individual's cognitive control.