Conventional wisdom holds that memory is like a serial recording device. In reality, memory is dynamic--not static--like a paper on which new texts (or versions of the same text) will be continuously recorded, thanks to the power or posterior information.
Memory is more of a self-serving dynamic revision machine: you remember the last time you remembered the event and, without realizing it, change the story at every subsequent remembrance. We pull memories along causative lines, revisiting them involuntarily and unconsciously. We continuously renarrate past events in the light of what appears to make what we think of as logical sense after these events occur.
By a process called reverberation, a memory corresponds to the strengthening of connections from a increase of brain activity in a given sector of the brain--the more activity, the stronger the memory. While we believe that the memory is fixed, constant, and connected, all this is very far from truth. What makes sense according to information obtained subsequently will be remembered more vividly.
We tend to more easily remember those facts from our past that fit a narrative, while we tend to neglect others that do not appear to play a causal role in that narrative. Consider that we recall events in our memory all the while knowing the answer of what happened subsequently. It is literally impossible to ignore posterior information when solving a problem. This simple inability to remember not the true sequence of events but a reconstructed one will make history appear in hindsight to be far more explainable than it actually was--or is.
We want to be told stories, and there is nothing wrong with that--except that we should check more thoroughly whether the story provides consequential distortions of reality. The way to avoid the ills of the narrative fallacy is to favor experimentation over storytelling, experience over history, and clinical knowledge over theories.
Of course, there is a way to use a narrative--but for a good purpose. Only a diamond can cut a diamond; we can use our ability to convince with a story that conveys the right message.
Source: 
Nassim Nicholas Taleb: The Black Swan: The Impact of the Highly Improbable