Lateral Inhibition
The amount of each bipolar cell response depends on the amount of the stimulation it receives from the receptor and the amount that this response is decreased by the lateral inhibition it receives from its neighboring cells.
Lateral inhibition can't explain White's illusion. In Figure 2.1 lateral inhibition sent by black cells A and C should make cell O lighter; in Figure 2.2 lateral inhibition sent by white cells A and C should make cell O darker. It is suggested that brightness induction follows the brightness contrast in the direction of the bar not the surrounding area.
Read more about this topic: White's Illusion