David Adam in The Guardian:
Dr Shamay-Tsoory, a psychologist at the Rambam Medical Centre in Haifa and the University of Haifa, said: “Sarcasm is related to our ability to understand other people’s mental state. It’s not just a linguistic form, it’s also related to social cognition.”
The research revealed that areas of the brain that decipher sarcasm and irony also process language, recognise emotions and help us understand social cues.
“Understanding other people’s state of mind and emotions is related to our ability to understand sarcasm,” she said.
More here.