This study took advantage of the subsecond temporal resolution of ERPs to investigate mechanisms underlying age- and performance-related differences in working memory. Young and old subjects participated in a verbal n -back task with three levels of difficulty. Each group was divided into high and low performers based on accuracy under the 2-back condition. Both old subjects and low-performing young subjects exhibited impairments in preliminary mismatch/match detection operations (indexed by the anterior N2 component). This may have undermined the quality of information available for the subsequent decision-making process (indexed by the P3 component), necessitating the appropriation of more resources. Additional anterior and right hemisphere activity was recruited by old subjects. Neural efficiency and the capacity to allocate more resources to decision-making differed between high and low performers in both age groups. Under low demand conditions, high performers executed the task utilizing fewer resources than low performers (indexed by the P3 amplitude). As task requirements increased, high-performing young and old subjects were able to appropriate additional resources to decision-making, whereas their low-performing counterparts allocated fewer resources. Higher task demands increased utilization of processing capacity for operations other than decision-making (e.g., sustained attention) that depend upon a shared pool of limited resources. As demands increased, all groups allocated additional resources to the process of sustaining attention (indexed by the posterior slow wave). Demands appeared to have exceeded capacity in low performers, leading to a reduction of resources available to the decision-making process, which likely contributed to a decline in performance.

Attending to novelty is a critical element of human behavior and learning. Novel events can serve as task-irrelevant distracters or as potential sources of engagement by interesting or important aspects of one's environment. An optimally functioning brain should have the capacity to respond differentially to novel events depending on the circumstances in which they occur. In the present study, a subject-controlled variant of the visual novelty oddball paradigm was employed under two different conditions in which novel stimuli were characterized either as distracters from a main task or as potentially meaningful “invitations” to explore the environment. Differences in context, derived from varying the emphasis of task instructions, strongly modulated both the behavioral and electrophysiological response to novelty. This modulation was not observed for processing earlier than the P3 component. Subjects who encountered novel events that served as distracters limited the amount of attention and processing resources they appropriated. Remarkably, under this condition, there were no differences in overall P3 amplitude, late positive slow-wave activity, or viewing duration between rare novel and frequent standard events. In contrast, subjects who encountered novel events as potential opportunities to explore augmented the attention and processing resources directed toward these events (as reflected by a larger P3 amplitude, late positive slow-wave activity, and longer viewing durations). Our results suggest that the processing of novelty within the visual modality involves several stages, including: (1) the relatively automatic detection of unfamiliar, novel stimuli (indexed by the N2); (2) the voluntary allocation of resources determined by the broader context in which a novel event occurs (indexed by the P3); and (3) the sustained processing of novelty (indexed by late positive slow-wave activity). This study provides evidence of the brain's ability to generate differential responses to novel events according to the circumstances under which they are encountered. It also points to a greater degree of top–down modulation of the processing of novelty than has been previously emphasized. We suggest that less commonly studied variables, such as subject control, may provide additional insight into the different ways in which novelty is processed.