Humans have an outstanding ability to generalize from past experiences, which requires parsing continuously experienced events into discrete, coherent units, and relating them to similar past experiences. Time is a key element in this process; however, how temporal information is used in generalization remains unclear. Latent-cause inference provides a Bayesian framework for clustering experiences, by building a world model in which related experiences are generated by a shared cause. Here, we examine how temporal information is used in latent-cause inference, using a novel task in which participants see “microbe” stimuli and explicitly report the latent cause (“strain”) they infer for each microbe. We show that humans incorporate time in their inference of latent causes, such that recently inferred latent causes are more likely to be inferred again. In particular, a “persistent” model, in which the latent cause inferred for one observation has a fixed probability of continuing to cause the next observation, explains the data significantly better than two other time-sensitive models, although extensive individual differences exist. We show that our task and this model have good psychometric properties, highlighting their potential use for quantifying individual differences in computational psychiatry or in neuroimaging studies.

We examined the maturation of decision-making from early adolescence to mid-adulthood using fMRI of a variant of the Iowa gambling task. We have previously shown that performance in this task relies on sensitivity to accumulating negative outcomes in ventromedial PFC and dorsolateral PFC. Here, we further formalize outcome evaluation (as driven by prediction errors [PE], using a reinforcement learning model) and examine its development. Task performance improved significantly during adolescence, stabilizing in adulthood. Performance relied on greater impact of negative compared with positive PEs, the relative impact of which matured from adolescence into adulthood. Adolescents also showed increased exploratory behavior, expressed as a propensity to shift responding between options independently of outcome quality, whereas adults showed no systematic shifting patterns. The correlation between PE representation and improved performance strengthened with age for activation in ventral and dorsal PFC, ventral striatum, and temporal and parietal cortices. There was a medial-lateral distinction in the prefrontal substrates of effective PE utilization between adults and adolescents: Increased utilization of negative PEs, a hallmark of successful performance in the task, was associated with increased activation in ventromedial PFC in adults, but decreased activation in ventrolateral PFC and striatum in adolescents. These results suggest that adults and adolescents engage qualitatively distinct neural and psychological processes during decision-making, the development of which is not exclusively dependent on reward-processing maturation.