“…Similarly, N400 effects are activated when a narrative describes a character's inappropriate emotional response to a given social situation (Leuthold, Filik, Murphy, & MacKenzie, 2012), when a statement conflicts with a person's moral values (Van Berkum, Holleman, Nieuwland, Otten, & Murre, 2009), or when their actions mismatch their (false) beliefs (Ferguson, Cane, Douchkov, & Wright, in press). Importantly for the current study, plausibility effects have been shown to supersede typical sentence-level semantic anomaly responses within an appropriate counterfactual discourse (Nieuwland, 2013;Nieuwland & Martin, 2012). Thus, by comparing N400 amplitudes for world-consistent and world-inconsistent conditions we aimed to examine to what extent counterfactual and factual representations were being used to interpret the unfolding discourse.…”