Context Engineering: Why Limiting AI Memory Makes It Smarter (The Agent Bottleneck)

The Paradox of Intelligence: Why Limiting an AI’s “Memory” Makes It Smarter In the 1990s, neuroscientist Antonio Damasio studied a perplexing patient. The man, named Elliot, had undergone surgery to remove a brain tumor, which accidentally damaged a small region of his prefrontal cortex. Post-surgery, his IQ scores were normal, his logical reasoning was sharp, and his memory was intact—all cognitive metrics were flawless. Yet, his life fell apart. He lost the ability to make decisions. Not because he couldn’t analyze, but because he analyzed too much. Choosing what to eat for lunch could involve a thirty-minute, detailed comparison of …