Previous studies have observed a tendency to associate the remnant (e.g., who) of ambiguous sluicing ellipsis with the closest/most local correlate (someone) in the matrix clause, as in Somebody said Fred fired someone, but I don’t know who. I present the results of three experiments investigating the interplay between locality and the discourse status of potential correlates. The studies exploit the discourse-linking property of which-phrases in ambiguous sluiced sentences, like A teacher scolded Max or Dotty, but I can’t remember which one, to explore whether the preference for more local correlates is modulated by the discourse status of the potential correlates. I propose a discourse economy constraint (Alternatives on Demand: Avoid positing new discourse alternatives without evidence), which interacts with structural constraints like locality. Evidence from several questionnaire studies, as well as three online self-paced reading studies, supports the predictions of a sentence processing model in which the discourse status of items in memory immediately impacts the retrieval of a correlate for the remnant of sluicing ellipsis and related constructions. In addition, the time point at which the interaction between processing biases appears is shown to depend on the strength or diagnosticity of the retrieval cues in which-phrase.