Source: http://www.theatlantic.com/health/archiv...

There are a few reasons why this occurs:

• The next-in-line effect: When you encounter a group of strangers with outstretched hands, your mind turns into a scared 9-year-old at the school talent show. You're not watching the other contestants; you're practicing your own routine. The process of both preparing to take in the others' names and to say your own, as Esther Inglis-Arkell  explained at i09, is so taxing that you don't devote any brain power to actually learning the new names.

• You're not really that interested: Maybe you're just making an appearance at this party and are planning to abscond shortly to a superior kick-back. Your level of interest can impact how well you remember something. "Some people, perhaps those who are more socially aware, are just more interested in people, more interested in relationships," Richard Harris, professor of psychology at Kansas State University, told ScienceDaily. "They would be more motivated to remember somebody's name."

• A failure of working memory: There are two types of storage in the brain: Long-term and short-term. The short-term variety is called "working memory," and it functions like a very leaky thermos. It doesn't hold much and it spills stuff out all the time. "You can hold just a little bit of information there and if you don't concentrate on it, it fades away rapidly," Paul Reber, a psychology professor at Northwestern University, told me in an email. "Information like a name needs to be transferred to a different brain system that creates long-term memories that persist over time."

• Names are kind of pointless: To answer the famous question, there's not much in a name, frankly. It doesn't actually tell you anything about the person you're meeting, and thus it doesn't give your brain anything to cling to. Steve may love parkour, but he'd love it just as much if he were Samuel or Sheldon. "Human memory is very good at things like faces and factual information that connects well to other information you already know," Reber said. Steve's waxing enthusiastic about his trasseur training sticks in your brain because it adheres to other information you already know. Wasn't District 13, that French parkour movie, really awesome? And hey, remember that time you studied abroad in Paris? All those little connections help solidify the memory of who Steve is and what he does.