The highest functions of our brains, including a carefully orchestrated sequence of complex cognitive skills in specific parts, handle the lowest form of wit such as sarcasm, new research suggests.

According to investigations by scientists from the University of Haifa, areas of the brain that decipher sarcasm and irony also process language, recognise emotions and help understand social cues, the Guardian newspaper reported.

"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," said Simone Shamay-Tsoory, a psychologist at the University of Haifa.

"Understanding other people's state of mind and emotions is related to our ability to understand sarcasm."

The team recruited 41 people who had suffered mild brain damage following accidents or illness. Together with 17 healthy volunteers, the scientists checked how they understood neutral and sarcastic statements read by actors.

One sarcastic example was: "Joe came to work and instead of beginning to work he sat down to rest. His boss noticed his behaviour and said 'Joe, don't work too hard'."

The study showed that people with damage in the prefrontal lobe struggled to pick out sarcasm. The others, including people with similar damage to other parts of the brain, were able to correctly place the sharp-tongued words into context.

The prefrontal lobe is known to be involved in pragmatic language processes and complex social cognition. The ventromedial section is linked to personality and social behaviour.

Shamay-Tsoory said the loss of the volunteers' ability to understand irony was a subtle consequence of their brain damage, which produced behaviour similar to that seen in people with autism.

"They are still able to hold and understand a conversation. Their problem is to understand when people talk in indirect speech and use irony, idioms and metaphors because they take each sentence literally. They just understand the sentence as it is and can't see if your true meaning is the opposite of your literal meaning," she said.

Her team proposes a three-stage neural pathway in our brains that enables us to understand irony. First, the language centre in the brain's left hemisphere interprets the literal meaning of words.

Next, the frontal lobes and right hemisphere process the speaker's intention and check for contradictions between the literal meaning and the social and emotional context.

Finally, the right ventromedial prefrontal cortex - our sarcasm meter - makes a decision based on our social and emotional knowledge of the situation.