In cocktail party situations multiple talkers speak simultaneously, which causes listening to be perceptually and cognitively challenging. Such situations can either be static (fixed target talker) or dynamic, meaning the target talker switches occasionally and in a potentially unpredictable way. To shed light on the perceptional and cognitive mechanisms in static and dynamic cocktail party situations, we conducted an analysis of error types that occur during a multi-talker speech recognition test. The error analysis distinguished between misunderstood or omitted words (random errors) and target-masker confusions. To investigate the effects of aging and hearing impairment, we compared data from three listener groups, comprised of young as well as older adults with and without hearing loss. In the static condition, error rates were generally very low, except for the older hearing-impaired listeners. Consistent with the assumption of decreased audibility, they showed a notable amount of random errors. In the dynamic condition, errors increased compared to the static condition, especially immediately following a target talker switch. Those increases were similar for random and confusion errors. The older hearing-impaired listeners showed greater difficulties than the younger adults in trials not preceded by a switch. These results suggest that the load associated with dynamic cocktail party listening affects the ability to focus attention on the talker of interest and the retrieval of words from short-term memory, as indicated by the increased amount of confusion and random errors. This was most pronounced in the older hearing-impaired listeners proposing an interplay of perceptual and cognitive mechanisms.