Above you see two checkerboards; the left has a high contrast, the right a low contrast. In the center of each there is a smaller 4×4 checkerboard patch within a green box. Compare their contrasts – initially, on “auto run”, their contrasts are going up and down in counterbalance.
Use the middle slider (or use the cursor left/right keys) to adjust the contrast of the two small checkerboards until they seem similar. When you are satisfied, uncheck “Draw surround” (or press the space bar). Now: without the surrounding checkerboards, the contrasts of the small patches no longer seem identical.
A case of contrast adaptation across space: Because the left checkerboard has a high contrast, the local contrast gain is reduced to bring the contrast transfer function into optimal range (this is usually a good thing!). On the right side the inverse happens. The shift of the contrast transfer function extends a little over space, here across the center patches. When the identical center patches pass these two different contrast transfer functions, their neural correlate indeed becomes different. Also known as “contrast contrast”.
Chubb C, Sperling G, Solomon JA (1989) Texture interactions determine perceived contrast. Proc Natl Acad Sci USA 86:9631–9635 [PDF]
Solomon JA, Sperling G, Chubb C (1993) The lateral inhibition of perceived contrast is indifferent to on-center/off-center segregation, but specific to orientation. Vision Res 33:2671–2683
Dakin (2005) Weak suppression of visual context in chronic schizophrenia. Current Biol 15(20):R822 [PDF]