We investigate if the neuropeptide oxytocin (OT), known to moderate social behaviour, influences strategic decision making in social dilemmas by facilitating the integration of incentives and social cues. Participants (N=29) played two economic games with different incentive structures in the fMRI scanner after receiving OT or placebo (following a double blind, within-subject design). Pictures of angry or neutral faces (the social cues) were displayed alongside the game matrices. Consistent with a priori hypotheses based on the modulatory role of OT in mesolimbic dopaminergic brain regions, the results indicate that, compared to placebo, OT significantly increases the activation of the nucleus accumbens during an assurance (coordination) game that rewards mutual cooperation. This increases appetitive motivation so that cooperative behaviour is facilitated for risk averse individuals. OT also significantly attenuates the amygdala, thereby reducing the orienting response to social cues. The corresponding change in behaviour is only apparent in the chicken (or anti-coordination) game, where aggression is incentivized but fatal if the partner also aggresses. Because of this ambiguity, decision making can be improved by additional information, and OT steers decisions in the chicken game in accordance with the valence of the facial cue: aggress when face is neutral; retreat when it is angry. Through its combined influence on amygdala and nucleus accumbens, OT improves the selection of a cooperative or aggressive strategy in function of the best match between the incentives of the game and the social cues present in the decision environment.