Relating False Memories to Schizophrenia

When I read Schacter's description of false memories, I related the concept of false memories to schizophrenia. Is it possible that the chemicals or regions in the brain that create false memories are crucial also in creating the hallucinations in Schizophrenia or any other psychological illness? For the sake of my argument, I will only relate false memories and schizophrenia. From what I've read, there isn't much definitive knowledge about the disorder, leaving the door open for questions. We know basic chemical interactions, some medications that work, and that somehow dopamine and dopamine receptors cause the disorder. Beyond that, we haven't been able to define the disorder. We don't know, for instance, which of the many kinds of dopamine receptors are important, or even how they work.

A leading commonality between the two is belief. The person remembering or the schizophrenic has absolute confidence that the event did/ is happening. This complete belief in one's own mind, when perception of events is considerably skewed, is a rare enough occurrence to warrant more investigation. I am, of course, relating an everyday occurrence and an extreme case, but I believe that all disorders are just exaggerated qualities of a normal personality.

Are the regions of the brain affected similarly? What chemicals are in play when these memories are recalled? Some of the same regions thought to be affected by schizophrenia (the hippocampus for example) are critical memory structures. There is not enough research on the physiology of memory to be able to compare the two, but again, a connection exists.

Research into these questions could lead to an advance in medicine. Finding more about the relationship between serotonin and emotion helped in the development of depression medication. Maybe finding the key to false memories will lead to a better treatment of schizophrenia. Or maybe, identifying what makes a false memory can remove the possibility of one.

I want to know why false memories exist, how we can believe in them. Are they protecting us from something? Or is it an occurrence of a slight chemical imbalance that is quickly corrected? From there I start to think of more existential questions, but those hardly relate to the topic at hand.

I realize I've made huge assumptions about both topics, so criticism is to be expected. Other things in the reading struck me, but they didn't lead to the same type of questions.