The neural mechanisms underlying decision-making to cooperate or defect were investigated using event-related potentials during an iterated computer Prisoner's Dilemma task, adapted to induce working memory operation. Event-related potentials from 64 leads of 22 participants were recorded during 90 trials and averaged depending on the condition of cooperation and defect. The P200 component of the event-related potentials provided evidence for activation differences between cooperation and defect. Cooperation elicited significantly increased P200 activation at parieto-occipital leads, while defect activated primarily the prefrontal electrodes. Functional mapping using Low Resolution Electromagnetic Tomography indicated that in the 150-180 ms time window Brodmann areas 19 (precuneus) and 17 (lingual gyrus), exhibited increased activation during cooperation, while Brodmann area 6 (precentral gyrus) exhibited increased activation when participants defected. In conclusion, the current study provides evidence that cooperation and defect elicit different brain activation at specific loci and within specific time windows.