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I'm actually about to release a 1st person narrative short story. I think the form is useful when the story takes the form of an imaginary conversation between the character and the reader. The character can then comment on their experiences during the story, etc. I think it's an effective technique for horror/suspense writing.
I just completed another read of God Emporer of Dune. Each chapter leads off with a 1st person journal entry and then transitions to 3rd person for the remainder of the chapter. That technique is effective in my opinion.
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