Accurate measurement of single‐trial responses is key to a definitive use of complex electromagnetic and hemodynamic measurements in the investigation of brain dynamics. We developed the multiple component, Event‐Related Potential (mcERP) approach to single‐trial response estimation to improve our resolution of dynamic interactions between neuronal ensembles located in different layers within a cortical region and/or in different cortical regions. The mcERP model asserts that multiple components defined as stereotypic waveforms comprise the stimulus‐evoked response and that these components may vary in amplitude and latency from trial to trial.Maximum a posteriori(MAP) solutions for the model are obtained by iterating a set of equations derived from the posterior probability. Our first goal was to use the mcERP algorithm to analyze interactions (specifically latency and amplitude correlation) between responses in different layers within a cortical region. Thus, we evaluated the model by applying the algorithm to synthetic data containing two correlated local components and one independent far‐field component. Three cases were considered: the local components were correlated by an interaction in their single‐trial amplitudes, by an interaction in their single‐trial latencies, or by an interaction in both amplitude and latency. We then analyzed the accuracy with which the algorithm estimated the component waveshapes and the single‐trial parameters as a function of these relationships. Extensions of these analyses to real data are discussed as well as ongoing work to incorporate more detailed prior information. © 2003 American Institute of Physics