Abstract
To make sense of the world around us, we must be able to segment a continual stream of sensory inputs into discrete events. In this review, I propose that in order to comprehend events, we engage hierarchical generative models that "reverse engineer" the intentions of other agents as they produce sequential action in real time. By generating probabilistic predictions for upcoming events, generative models ensure that we are able to keep up with the rapid pace at which perceptual inputs unfold. By tracking our certainty about other agents' goals and the magnitude of prediction errors at multiple temporal scales, generative models enable us to detect event boundaries by inferring when a goal has changed. Moreover, by adapting flexibly to the broader dynamics of the environment and our own comprehension goals, generative models allow us to optimally allocate limited resources. Finally, I argue that we use generative models not only to comprehend events but also to produce events (carry out goal-relevant sequential action) and to continually learn about new events from our surroundings. Taken together, this hierarchical generative framework provides new insights into how the human brain processes events so effortlessly while highlighting the fundamental links between event comprehension, production, and learning.