The Signal Analysis and Interpretation Laboratory (SAIL) at the University of Southern California, US, is one of the few, perhaps the only human-centered information processing lab to have built and tested an ‘Automatic Sarcasm Recognizer’.
 Lab director Professor Shrikanth (Shri) S. Narayanan and colleagues started out with the premise that : “Sarcasm, also called
verbal irony, is the name given to speech bearing a semantic
interpretation exactly opposite to its literal meaning.” With that in
mind, they then focussed on 131 occurrences of the phrase “yeah right” in the ‘Switchboard’ and ‘Fisher’ recorded telephone conversation databases. Human listeners who sifted the data found that roughly 23% of the “yeah right”s
which occurred were used in a recognisably sarcastic way. The lab’s
computer algorithms were then ‘trained’ with two five-state Hidden
Markov Models (HMM) and set to analyse the data – and the programmes performed relatively well, successfully flagging some 80% of the sarky “yeah right”s.
But what should a computerised ‘agent’ do
if it detects sarcasm in a caller’s dialogue? “As for handling the
sarcasm once it’s detected, a dialogue agent ought to do what real
humans do and acknowledge it. Either generate some synthetic laughter
or, for more advanced agents, somehow point out that it ‘gets’ the
joke.” say the team.
And, by a set of circumstances which are almost certainly not
coincidental, the SAIL team may be in a position to provide the
requisite synthetic laughter.  To Be Continued. . .

The paper, “YEAH RIGHT”: SARCASM RECOGNITION FOR SPOKEN DIALOGUE SYSTEMS was published in the proceedings of the 9th International Conference on Spoken Language Processing/INTERSPEECH 2006, p. 1838-1841.