It's easy to think of the eye as a dumb camera that just sends images to the brain where all the real work is done. As it happens, this is not the case. The eye itself has built into it many clever tricks to make it more intelligent. One of these tricks is lateral inhibition. If the eye were electronic, this would be one of the things referred to by hackers as a truly cool hack.

In nature, edges are important. It's important not to walk into trees, it's important to see the horizon, it's important to not walk off the edge of a cliff (unless you're a lemming of course). So the eye has special hardware for detecting edges. It works like this. At the back of the eye is the retina, which has a whole bunch of light receptors. These light receptors are connected to neurons that take the image to the brain. If they were connected straight through, that would pretty much be a dumb camera. But they're not. Each neuron is connected to the light receptor (let's call it a rod) directly in front of it, which gives a positive signal when light falls on it. But it's also connected to the ones next to it (to the left and right). The trick is that this connection (the lateral connection) is inhibitive; that is that it gives a negative signal. The positive signal from the receptor directly above and the negative signals from the lateral receptors are added together to send the signal to the brain. A diagram may help. Let's say we have a sharp edge from dark (D) to light (L) falling on the retina on receptors R1 to R7.

-----------------------------------------------  Retina
R1      R2      R3     R4     R5    R6    R7

N1      N2      N3     N4     N5    N6    N7
To explain the original idea, the value at N4 isn't the value just at R4, but it might be something like R4-0.5*R3-0.5*R5

So what? Well, now say you have a sharp change from say, dark to light. Now consider N3. R3, the receptor above N3, is in dark, so we get the straightforward darkness effect. But, R4 is in light, so it's going to have a huge positive value (because the receptors activate when exposed to bright light). But it feeds negatively into N3, so N3 will be more negative and look darker than it actually is. Alternatively, consider N4. R4 (the positive connection) is in light, so it will be positive. But R3 is in darkness (i.e will make a negative signal) but there's an inhibitive effect, and a double negative is positive, so it will actually increase the measure at N4, making it look brighter than it actually is.

The net effect is this: The lateral inhibition makes the eyes detect the sharp change in brightness seem even sharper by making the contrast even stronger. It's like an edge-detector built straight into our eyes!

This effect is the basis of many optical illusions, for example, the Mach banding effect.

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