Schema theory is a cognitive theory of how humans process incoming information, relate it to existing knowledge and use it. Schemas, which are mental representations that are derived from prior experience and knowledge, are used to organize prior knowledge and will affect information processing and behaviour in specific settings. However, as schemas cannot be observed directly, we can study them through memory, which can be directly observed with tests. In this essay I will explain schema theory using Bartlett’s study on memory and prior knowledge. A study conducted by Bartlett aims to investigate how memory of a story will be different between people from different cultural backgrounds and unfamiliarities of the text. The participants are all from Britain and are told the American tale “The war of the ghosts”, consisting of names and concepts that are unfamiliar to them. The participants are classified into one of the two conditions. The first group was asked to use repeated reproduction, where the participants heard the story and were told to recall it after a short time and then to do so again repeatedly various time periods. The second group was told to use serial reproduction, which they had to recall the story and immediately repeat it to another person. Bartlett found out that contents of the story were distorted to different extents, where three patterns could be observed. Firstly, there is an increase in consistency of the story with the participants expectations due to their own cultural background, which is known as assimilation. Secondly, information that is seen to be useless is not remembered so the story became shorter, which is known as leveling. Thirdly, the sequence and word choice of the story was changed to be more familiar to them, which is known to be sharpening. In conclusion, the study conducted by Bartlett explains the schema theory by indicating that the content of the story will be distorted as to make more sense in terms of their cultural background, in which they are organized and recalled in the form of schemas.