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Despite being a pan-cultural phenomenon, laughter is arguably the least understood behaviour deployed in social interaction. As well as being a response to humour, it has other important functions including promoting social affiliation, developing cooperation and regulating competitive behaviours. This multi-functional feature of laughter marks it as an adaptive behaviour central to facilitating social cohesion. However, it is not clear how laughter achieves this social cohesion. We consider two approaches to understanding how laughter facilitates social cohesion – the ‘representational’ approach and the ‘affect-induction’ approach. The representational approach suggests that laughter conveys information about the expresser’s emotional state, and the listener decodes this information to gain knowledge about the laugher’s felt state. The affect-induction approach views laughter as a tool to influence the affective state of listeners. We describe a modified version of the affect-induction approach, in which laughter is combined with additional factors – including social context, verbal information, other social signals and knowledge of the listener’s emotional state – to influence an interaction partner. This view asserts that laughter by itself is ambiguous: the same laughter may induce positive or negative affect in a listener, with the outcome determined by the combination of these additional factors. Here we describe two experiments exploring which of these approaches accurately describes laughter. Participants judged the genuineness of audio–video recordings of social interactions containing laughter. Unknown to the participants the recordings …