Simulations explored the inability of the TRACE model of spoken-word recognition to model the effects on human listening of acoustic-phonetic mismatches in word forms. The source of TRACE's failure lay not in its interactive connectivity, not in the presence of interword competition, and not in the use of phonemic representations, but in the need for continuously optimised interpretation of the input. When an analogue of TRACE was allowed to cycle to asymptote on every slice of input, an acceptable simulation of the subcategorical mismatch data was achieved. Even then, however, the simulation was not as close as that produced by the Merge model.