Every time we encounter a new fictional story we create a new world. The default assumption is that this world contains everything the real world contains. We then modify this representation based on several constraints [...].This talk of representation (and world creation) can easily mislead, and the formulations in Skolnick and Bloom's paper are a good example for this, so let's have a closer look.
Fictional worlds are a product of the imagination; for example, when we read a story, we imagine a fictional world in which the characters of that story live, and in which the events that make up the plot of the story happen. There are, however, different senses of 'imagining' a fictional world. When you read a Sherlock Holmes story, you imagine an early-20th-century London with a certain famous detective and his sidekick investigating complicated cases there. Of course, in some sense you are creating that world in your imagination — perhaps you visualize some of the settings or characters when you read passages in which they are described; perhaps you even imagine the coldness of a certain evening or the dusty smell of a train compartment; perhaps you feel sympathy or disgust for some of the people in the story. But then there is a second, different sense of imagining the Sherlock Holmes world: the sense in which its creator, Arthur Conan Doyle, has fixed the recipe for your imaginative processes by writing those descriptions, playing to those emotions. The world of the story is the product of the author's imagination in a different sense from that in which it is the product of a reader's imagination. The imaginative processes of writing a story and so constituting that world are different from those of reading it and constituting the world — although they probably overlap in some significant portion.
Let's first note, then, that the sense in which Skolnick and Bloom talk of creating a fictional world must be the first sense, the sense in which a reader imagines the world of the story she reads. Clarifying this, and keeping these senses apart would do away with a confused statement they make about the use of the term 'story':
Our theory states that we create a new world every time we encounter a new story. But this is a little misleading, since it hinges on how we define 'story'. Surely it is not the case that every novel or movie is its own story, since that would involve creating new worlds for sequels. [...] A story must thus be broader than a single work of fiction."If this were correct, then we would be wrong to say that there are 56 short stories and four novels featuring the famous detective, which each have a plot and tell a story. What we would have to say instead is that there is a single story that is spread over these 60 literary works, and presumably over many others which include guest appearances of Sherlock Holmes, plus films and television series', all of which belong to the same single story. The story wouldn't even be complete: if someone writes another novel as a sequel of Conan Doyle's works, that would be part of it, and there might potentially infinitely many such sequels. But we don't really think that 'the Sherlock Holmes story' is incomplete and open-ended in principle, do we?
The reason for this bizarre new way of talking would be that whenever we read one of the different texts, we create a new world, one distinct from all other worlds created so far. Not making the distinction introduced above, between different senses in which we create a fictional world when we imagine one while reading fiction vs. writing ficton, this makes it seem as if we'd 'create' a new world in the sense in which Conan Doyle thinks up the Sherlock Holmes world whenever we merely read one of the novels or short stories. And since that obviously can't be right, we seem to need a revised use of 'story', a use in which all the texts belonged only to a single story (one that was produced by the author).
But there is nothing wrong with multiple stories being set in the same fictional world, and still be different stories. The fictional world of the Sherlock Holmes literature is not created afresh every time some reader encounters one of the stories. It has been created once, by the author, when writing those pieces, and it's been one and the same since then. Of course, whenever some reader encounters the stories, she would have to imagine that world afresh, and so in a different sense 'create' it. But in that sense, this causes no problem whatsoever, and therefore no need to revise the usage of the term 'story'. (What Skolnick and Bloom must have had in mind when they say that new worlds aren't created by sequels is the first sense: of course the author doesn't think up a new world when he writes a sequel.)
Compare: every time someone draws the rabbit-duck picture on a sheet of paper, he 'creates' the drawing; but that doesn't mean that there are infinitely many inventors of that particular image. There is only one inventor, the person who created it in the first place. And the sense of 'create' in which that person did create it is a different sense from the one we use when we say that you create it by drawing it on a piece of paper.
 Deena Skolnick and Paul Bloom, "The Intuitive Cosmology of Fictional Worlds", in The Architecture of the Imagination, edited by Shaun Nichols, Oxford: Clarendon 2009, 73–86, 77.
I think I will refer some more often to this paper; although I start here with some criticism of its terminology, it contains some interesting results and ideas. But that's for a later post.
 Ibd., 81.