Above you see many horizontal black stripes and two vertical green striped bars. Do the green bars have identical luminance? They certainly differ in perceived brightness. Grab the slider with the mouse and observe the startling change in brightness when the black grating is moved away from the green bars.
You can try to match the two greenish colours with the black grid in place – I find it very difficult to match them. You can also change the large black grating to some other colour: for instance a slightly darkened green: the effect is still there.
Lateral inhibition predicts the opposite effect, so the mechanism must be quite different. See Corney & Lotto (2007) for a promising new explanatory approach. White (1979, 1981) described these luminance effects, called White’s illusion or Munker-White illusion. When the horizontal stripes differ in color (not black/white as here), strong color shifts result, the Munker illusion or Color Assimilation.
Anderson BL (1997) A theory of illusory lightness and transparency in monocular and binocular images: the role of contour junctions. Perception 26:419–453
Blakeslee B, McCourt M (2004) A unified theory of brightness contrast and assimilation incorporating oriented multiscale spatial filtering and contrast normalisation. Vision Res 44:2483–2503
Corney D, Lotto RB (2007) What Are Lightness Illusions and Why Do We See Them? PLoS Comput Biol 3:e180
This interesting paper shows that this illusion “automatically” occurs as a by-product when an artificial neural network is trained for brightness constancy.
Taya R, Ehrenstein WH & Cavonius CR (1995) Varying the strength of the Munker-White effect by stereoscopic viewing. Perception 24:685–694
Salmela VR, Vanni S (2013) Brightness and transparency in the early visual cortex. Journal Vision vol 13 no 7 article 16
White M (1979) A new effect on perceived lightness. Perception 8:413–416
White M (1981) The effect of the nature of the surround on the perceived lightness of gray bars within square-wave test gratings. Perception 10:215–230
White M (2010) The Early History of White’s Illusion. Colour: Design & Creativity 5:7,1–7 [PDF]
Demo from Ted Adelson’s site
Transparency model implemented by Eric Saund (be sure to follow the link to Discussion)