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In psychology, confabulation is the spontaneous narrative report of events that never happened. It consists of the creation of false memories, perceptions, or beliefs about the self or the environment—usually as a result of neurological or psychological dysfunction. Patients with Korsakoff's syndrome, a form of amnesia caused by alcohol abuse or malnutrition, characteristically confabulate by guessing an answer or imagining an event and then mistaking their guess or imagination for an actual memory. When it is a matter of memory, confabulation is the confusion of imagination with memory, or the confused application of true memories. Confabulations are difficult to differentiate from delusions and from lying. With respect to memory, wild confabulations about one's past are rare in the absence of organic causes (e.g., brain damage), and the term "confabulation" is often restricted to these types of distortions. In contrast, even neurologically intact people are susceptible to memory errors or confusions due to psychological causes.

Organic causes
Berlyne (1972) defined confabulation as "...a falsification of memory occurring in clear consciousness in association with an organically derived amnesia". He distinguished between:


 * "momentary" (or "provoked") confabulations—fleeting, and invariably provoked by questions probing the subject's memory, sometimes consisting of "real" memories displaced in their temporal context.
 * "fantastic" (or "spontaneous") confabulations—characterized by the spontaneous outpouring of irrelevant associations, sometimes bizarre ideas, which may be held with firm conviction.

Patients who have suffered brain damage or lesions, especially to the prefrontal cortical regions, may have confabulation of memories as a symptom. Patients with Korsakoff's syndrome characteristically confabulate by guessing an answer or imagining an event and then mistaking their guess or imagination for an actual memory. In some cases, confabulation results from the brain's chemistry, a mapping of the activation of neurons to brain activity. Confabulation can also occur as a result of damage to the anterior communicating artery (ACoA), in the Circle of Willis. Patients with a split-brain will confabulate under experimental conditions.

Some military agents, such as BZ, and deliriant drugs such as those found in datura, notably scopolamine and atropine, may also cause confabulation.

Within personal relationships, confabulation may be difficult to detect. Regardless of its biological or psychological etiology, simple lies and purposeful deception are included in the confabulation differential, as well as deep rooted psychopathological disturbance and early-stage dementia. The historical background of the confabulating individual rarely provides supporting evidence for their "fables", however tangentially related. Fables may be embellished beyond any possible evidentiary support and will usually ultimately reveal the disorder if appropriate investigations are applied. Those with long term relationships are most likely to recognize the disorder most quickly. Confabulations usually involve harmless matters, unlike the paranoid and psychotic delusions expressed in defense of abnormal actions or serious criminal actions.

Psychological causes
Bartlett's early 20th century studies of remembering arguably involved the first concerted attempt to look at memory-illusion phenomena. In one experiment, Bartlett asked a group of students to read an Indian folktale and then recall its details at various time-intervals. As well as errors of omission he found numerous errors of commission whereby participants had adapted or added to the story to make it more rational or consistent.

In the 1970s a number of researchers and theories promoted what has been called the constructivist view of memory, maintaining that reasoning influences memory, in contrast to a prevailing view at the time that memory supports reasoning. Theorists such as Bransford and Franks noted the significance of personal beliefs and desires, or more technically scripts and schemas, in memory retrieval.

constructivism had fallen out of favor: critics saw it either as false or as untestable. Memory is presumably not always reconstructive, since most is patently veridical. Constructivism cannot simply be rephrased as the thesis that memory is not always reproductive. As Reyna and Lloyd point out, this amounts to the claim that memory is sometimes reproductive and sometimes reconstructive – which is unexplanatory and unfalsifiable. Because of this a number of current theories focus on how normally accurate memory systems sometimes fail. Notably, both the source-monitoring framework and fuzzy-trace theory purport to indicate when false memories are likely to occur, and also to give a more detailed explanation than either reproductive or constructivist views.

Source monitoring is the process by which we discriminate between internally and externally derived memory sources as well as differentiations within the external and internal domains – differentiating between two external sources or between internal sources, for instance between what was said and what was thought. The theory postulates that these decisions are made based on the characteristics of memories compared to norms for memories for different sources, such as the proportions of perceptual, contextual, affective, and semantic information featured in the encoding of the memory. Under the source-monitoring framework false memory is seen as a failure to attribute information to the correct source. This happens when there is insufficient information available to discriminate between different sources (perhaps because of natural deterioration), or when the wrong criterion is used to discriminate. For example, a doctor might mistakenly think a patient is on a specific medicine because he was discussing the medicine with a colleague shortly after seeing the patient, or a songwriter might think of a particular sequence of notes as his own creation (see cryptomnesia).

Fuzzy-trace theory is based on the assumption that memory is not stored in unitary form. Instead memories are encoded at a number of levels, from an exact "verbatim" account, to "gist" which represents what we feel or felt was the overall meaning of the event. False memory effects are usually (but not always) explained as a reliance on gist traces in a situation when verbatim traces are needed. Because of this people may mistakenly recall a memory that only goes along with a vague gist of what happened, rather than the exact course of events. Three reasons are proposed: First, there is thought to be a general bias towards the use of gist traces in cognition due to their resource efficiency, and people will tend to use gist traces when they seem sufficient. Second, verbatim traces are said to be inherently less stable than gist traces, and decay faster. Third, in the process of forgetting, memories fragment and gist and verbatim traces can become independent.