Limitations seen in dual-task situations have commonly been explained in terms of theories characterized by three discrete stages of information processing (i.e. cognitive bottleneck theory). We take a neural dynamic approach to understanding how the cognitive system processes stimuli within the psychological refractory period paradigm and propose that a capacity limited stage of processing emerges as the natural result of settling competition among presented stimuli as they move from perceptual processing into cognitive stages of processing. Using a new action dynamics methodology, participants respond to stimuli via a Nintendo Wii remote-controlled cursor. Competition within the cognitive system is manifested in the subtle motor movements associated with the trajectories of the participants responses. It was found that more competition is manifested when stimuli are presented at smaller SOAs than with larger ones and that inhibition is manifested with the larger SOAs.