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Individuals with chronic schizophrenia exhibit performance deficits on tasks of social cognition, particularly in the domains of emotion processing, theory of mind, social perception, and attributional style, and these impairments are uniquely associated with poor functional outcome. Researchers have begun to investigate the pattern and magnitude of social cognitive impairment among individuals early in the course of schizophrenia and in people considered to be at elevated risk for psychosis, such as clinical high-risk samples and unaffected relatives of probands. This chapter evaluates the emerging research literature on social cognition in the early phase of schizophrenia. For each of the four social cognitive domains noted above, we provide an overview of common assessment methods and review relevant research comparing first episode/recent-onset schizophrenia patients, clinical high-risk samples (i.e., putatively prodromal), and genetic high-risk (i.e., unaffected relatives) to matched healthy control subjects. Deficits in emotion processing, theory of mind, and social perception are clearly detectable in first-episode/recent-onset patients and are comparable in magnitude to those seen in chronically ill patients. Among clinical high-risk and unaffected relatives, the magnitude of impairment is more variable and, in general, appears to be smaller than impairments seen among those with established illness. Attributional style is the least studied social cognitive domain and consistent patterns have not yet been identified. The implications and limitations of existing studies, and important areas for further research, are discussed.