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The disposition for prosocial conduct, which contributes to cooperation as arising during social interaction, requires cortical network dynamics responsive to the development of social ties, or care about the interests of specific interaction partners. Here, we formulate a dynamic computational model that accurately predicted how tie formation, driven by the interaction history, influences decisions to contribute in a public good game. We used model-driven functional MRI to test the hypothesis that brain regions key to social interactions keep track of dynamics in tie strength. Activation in the medial prefrontal cortex (mPFC) and posterior cingulate cortex tracked the individual’s public good contributions. Activation in the bilateral posterior superior temporal sulcus (pSTS), and temporo-parietal junction was modulated parametrically by the dynamically developing social tie—as estimated by our model—supporting a role of these regions in social tie formation. Activity in these two regions further reflected inter-individual differences in tie persistence and sensitivity to behavior of the interaction partner. Functional connectivity between pSTS and mPFC activations indicated that the representation of social ties is integrated in the decision process. These data reveal the brain mechanisms underlying the integration of interaction dynamics into a social tie representation which in turn influenced the individual’s prosocial decisions.