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So someone's knowledge about the world and their understanding of the world is going to be used in social situations (their semantic memory), and so is memories of their personal history (their episodic memory). Knowledge is contextualized, whatever someone knows, this knowledge was learned from some experience that may also be recalled (consciously or unconsciously) at various times.

People might also use knowledge of their attitudes and preferences, their abilities, shortcomings, behaviors or their identity as a whole. They use their knowledge of their own history and of the world around them. They use this knowledge on a moment to moment basis all of the time, in social interactions or otherwise.

When someone uses knowledge of their personal history (their memories), they may interpret this information in their own way. People have their own beliefs and understanding of what happened. Each memory has its own implication to the person, and what each memory means, how the person remembers it, what they learned from it, etc - is going to vary from person to person. Even for two people that were at the same event and remember the same details, the knowledge they learned is going to be different.

Sensory information is also remembered, people have a "feel" for each memory and what it was like being there. How someone learns from memory is something that will never be completely understood because it is so complicated. Different memories are linked in some way, people use all or some of their memories to interpret the facts and information they have. In that way, semantic and episodic memories are linked. People may bias facts and information, memories, and feelings and interpret them in their own personal way instead of a more truthful way or the truth.

Each memory, or even knowledge and information, is going to have a certain personal meaning and emotive power. Memories and knowledge make people feel in possibly deep, meaningful ways - or nothing at all. They may also impact judgement, perception of others, problem solving skills, etc. Memory is a resource for living, it impacts what you feel, forms who you are, and helps determine what you are and aren't conscious of. For instance if you had a personal history of something, say perhaps abuse, then you might be more conscious of such things.

Memories may provide a parallel model of everyone else's inner life. People are constantly interpreting and predicting the behavior of others and, as a result, adjust their conduct according to their analysis. We use our experience to explain the actions of others, or even our own actions. Our awareness of what is going on in a situation is going to to then be related to our memories and past experience. We might be more conscious of certain situations and certain feelings if we have experience of it, giving us more insight into our subjective state and more insight into others feelings.

How do people perceive and evaluate others? Obviously their autobiographical memory is going to play a role in how they do that. People make attributions and other daily explanations. Indeed, in order to analyze the situations in which we find ourselves, to make decisions, or to understand, evaluate and predict the behavior of others, everyday life often leads us to refer to these memories.

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Source:  OpenStax, Emotion, cognition, and social interaction - information from psychology and new ideas topics self help. OpenStax CNX. Jul 11, 2016 Download for free at http://legacy.cnx.org/content/col10403/1.71
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