A psychacoustic phenomenon
Imagine wandering into your favorite pub. One of your friends, let's call him Charly, sits at the close left end of the bar, a few feet away from you. At the far right end, some 20 feet away from you, sits Fred. As you walk into the place, Fred and Charly turn towards you and say "Hi!"
But something strange happens. Although you can clearly see two distinct people moving their lips, you can hear only one sound coming from the far right end of the bar! Are you becoming deaf on the left side? Has Charly suddenly become a mute? Have you entered the Twilight Zone? Not likely. You have become a victim of the Haas effect!
The Haas effect, technically speaking, is the psychoacoustic phenomenon, that one's brain cannot distinguish two or more identical sounds coming from different directions at more or less the same time. The brain will perceive only one soundsource, with the added volume of both sounds, instead. The brain will perceive its location at the position of the source of the first sound to enter your ears. In this case, Charly most likely had a few more beers than Fred and so he was a bit slower at greeting you.
The blessings of the Haas effect
Although it may seem like a bit of a bug in the auditory cortex, we should be quite happy with the Haas effect. It has some very nice and downright cool applications. Furthermore, we would go nuts without it.
First of all, the Haas effect is an essential aspect for the perception of reverb. Without it, we would hear millions of voices instead of just one (or two) in the pub, because each voice bounces of the walls reaching your ears many times. Imagine hearing Celine Dion on the radio a million times at once. It would drive me insane anyway.
Second, the phenomenon allows the flanging effect to happen. A flanger is a device that delays a copy of a sound and then adds it to the original. Because we cannot hear the two distinct sounds, due to the short delaytime, we only perceive the comb filter effect due to the phase difference in the two sounds.
Last but not least, the Haas effect can be used in conjunction with other psychoacoustic effects to create 3D sound from only two speakers. This allows you to hear sounds coming from the rear while the speakers are actually in front of you.