Humans demonstrate differences in performance on cognitive rule learning tasks which could involve differences in properties of neural circuits. An example model is presented to show how gating of the spread of neural activity could underlie rule learning and the generalization of rules to previously unseen stimuli. This model uses the activity of gating units to regulate the pattern of connectivity between neurons responding to sensory input and subsequent gating units or output units. This model allows analysis of network parameters that could contribute to differences in cognitive rule learning. These network parameters include differences in the parameters of synaptic modification and presynaptic inhibition of synaptic transmission that could be regulated by neuromodulatory influences on neural circuits. Neuromodulatory receptors play an important role in cognitive function, as demonstrated by the fact that drugs that block cholinergic muscarinic receptors can cause cognitive impairments. In discussions of the links between neuromodulatory systems and biologically based traits, the issue of mechanisms through which these linkages are realized is often missing. This model demonstrates potential roles of neural circuit parameters regulated by acetylcholine in learning context-dependent rules, and demonstrates the potential contribution of variation in neural circuit properties and neuromodulatory function to individual differences in cognitive function.This article is part of the theme issue 'Diverse perspectives on diversity: multi-disciplinary approaches to taxonomies of individual differences'.