The narrator of Ambrose Bierce's short story "An Occurrence at Owl Creek Bridge" knows everything about the protagonist, Peyton Farquhar: who he is, what he does, and what he thinks and feels. The story is told in third person; we know that because the pronouns are he, his, and him rather than I, me, and mine. We would say, then, that the story is written from a limited (because we only know the inner workings of one character's mind) omniscient point of view.
While the entire story is told from this point of view, it is written in sections or parts, and there is a distinct shift in perspective between parts II and III. In the first two parts, the narrator gives us an account of how Farquhar came to be standing at the edge of a plank, noose around his neck, looking down at Owl Creek below him. We get the facts, so to speak, and just a hint of his feelings and thoughts.
The final section of the story is a flashback, a wishful fantasy about escaping his fate. It is still told in third person, but it is descriptive and personal in a way the rest of the story is not. Of course we do not realize this is all a flashback until the final lines of the story, but we are caught up in his struggle to survive because the narrator reveals so much of the condemned man's thoughts, experiences, feelings.
The flashback could not have been written the same way as the opening sections of the story or it would have been neither interesting nor believable for the reader. Compare this matter-of-fact telling from the first part of the story to the more dramatic passage from part III:
The preparations being complete, the two private soldiers stepped aside and each drew away the plank upon which he had been standing. The sergeant turned to the captain, saluted and placed himself immediately behind that officer, who in turn moved apart one pace. (part I)
He had come to the surface facing down the stream; in a moment the visible world seemed to wheel slowly round, himself the pivotal point, and he saw the bridge, the fort, the soldiers upon the bridge, the captain, the sergeant, the two privates, his executioners. They were in silhouette against the blue sky. They shouted and gesticulated, pointing at him. (part III)
The change in perspective adds the necessary drama to make the flashback exciting and, more importantly, believable. This more dramatic storytelling also serves as a sharper contrast when the narrator tells us, matter-of-factly, that this was all simply a dream and now Farquhar is hanging over Owl Creek, just as the soldiers intended.
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