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They are not very smart
Some people are not too smart and intelligent to understand that the other person was sarcastically saying something.
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They are socially awkward
Some people do not care wherever they are. They may dislike sarcasm in social gatherings and intentionally don’t react to it.
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They are sensitive
If a person is highly emotional or sensitive, they may not understand the tone and the intention in which that sarcastic comment is spoken. (See 20 Signs That You Are Emotionally Sensitive)
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They are offended by it
Some people understood the sarcastic comment, but as they felt offended and do not find it funny, they do not appreciate those statements.
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They have a different sense of humour
All people have different levels of sense of humour. If a person is laughing at a sarcastic comment made by a third person, it is highly possible that the other person did not find much humour in the same comment and did not laugh. Hence, understanding sarcasm depends on person to person.
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They are Anti-Social
Anti-Social people usually do not comprehend sarcasm as they do not participate in social interactions. (See Why some people don’t like family gatherings?)
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It contains unknown references
If a sarcastic comment is passed based on outside references such as Movies, TV shows, or books that you are not aware of, you will not understand the sarcasm.
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The tone
The tone is a huge variable for making people differentiate between the sarcastic talk and the usual talk. If a sarcastic comment is said in a serious tone, one will not grasp whether it is sarcastic or rational.
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They never use it
Some people do not ever use sarcasm and say comments that include sarcasm. Moreover, they do not even understand if someone uses it.
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It is a defence mechanism
If a person passes mean comments for the other person, this could prevent them from listening and understanding sarcasm.
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They are too young or too old
If a person is very young or old, they may not have the ability to understand sarcasm.
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It is not in their tradition
Some people have never been exposed to sarcasm before, as it was never used in their culture.