To understand the endogenous components of the event-related brain potential (ERP), we must use data about the components' antecedent conditions to form hypotheses about the information-processing function of the underlying brain activity. These hypotheses, in turn, generate testable predictions about the consequences of the component. We review the application of this approach to the analysis of the P300 component. The amplitude of the P300 is controlled multiplicatively by the subjective probability and the task relevance of the eliciting events, whereas its latency depends on the duration of stimulus evaluation. These and other factors suggest that the P300 is a manifestation of activity occurring whenever one's model of the environment must be revised. Tests of three predictions based on this “context updating” model are reviewed. Verleger's critique is based on a misconstrual of the model as well as a partial and misleading reading of the relevant literature.
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