In a recent study published in Cell, Johannes Felsenberg and collaborators of the Waddell group studied the neural mechanisms of extinction in the small brain of Drosophila.
They discovered that extinction results from competition between two memories of opposing valence.
The full paper can be viewed here.
The work was featured in a Preview in Cell by Sheena Josselyn and Paul Frankland, Fear Extinction Requires Reward.
Johannes Felsenberg, Pedro Jacob and Nils Otto discuss the work in a short film entitled Not Bad Is Good.