This paper presents a model-based investigation of mechanisms underlying the reduction of mismatch negativity (MMN) amplitudes under the NMDA-receptor antagonist ketamine. We applied dynamic causal modeling and Bayesian model selection to data from a recent ketamine study of the roving MMN paradigm, using a cross-over, double-blind, placebo-controlled design. Our modeling was guided by a predictive coding framework that unifies contemporary "adaptation" and "model adjustment" MMN theories. Comparing a series of dynamic causal models that allowed for different expressions of neuronal adaptation and synaptic plasticity, we obtained 3 major results: 1) We replicated previous results that both adaptation and short-term plasticity are necessary to explain MMN generation per se; 2) we found significant ketamine effects on synaptic plasticity, but not adaptation, and a selective ketamine effect on the forward connection from left primary auditory cortex to superior temporal gyrus; 3) this model-based estimate of ketamine effects on synaptic plasticity correlated significantly with ratings of ketamine-induced impairments in cognition and control. Our modeling approach thus suggests a concrete mechanism for ketamine effects on MMN that correlates with drug-induced psychopathology. More generally, this demonstrates the potential of modeling for inferring on synaptic physiology, and its pharmacological modulation, from electroencephalography data.