Motion Aftereffect (Waterfall Illusion)  

You may also try to cover one eye, adapt over 3 cycles and then test with the other eye (for this, you will need to stop the movie at the right point…). Well, how strong is your "interocular transfer”?

This is often explained in terms of "fatigue” of the class of neurons encoding one motion direction. It is probably more accurate to interpret this in terms of adaptation or "gain control”.

We use the motion aftereffect in combination with EEG recordings as a tool to analyse the human motion system (→motion projects). For a more detailed explanation and a neat demo of the "waterfall effect” see George Mather’s MAE page.

Sources

Aristotle "De Somnis” (translated by Beare JI, 1931) University of Virginia Library ← chapter 2, G5r (search for ‘river’)
[Interestingly, Aristotle did not describe the reverse motion, rather "…things really at rest are then seen moving”.]

Mather, Verstraten & Anstis (1998) The motion aftereffect: a modern perspective. Cambridge, Mass: MIT Press

George Mather’s MAE page (part of his motion site)

Kohn, A, and Movshon, JA (2003) Neuronal adaptation to visual motion in area MT of the macaque. Neuron 39: 681-691 [PDF]

The Motion Aftereffect homepage