@markhenick
The perception isn't "wrong." It's a product of the brain's adaptability for perceiving *relative* colors.
Here's the mechanics of how this illusion works, and how your brain manufactures the "yellow."
Blurring the image, reveals the "yellow" circle is indeed grey. But it also reveals that the entire image is biased toward blue, as if you were seeing this image under a strong blue light.
Removing the color cast from the image, reveals that the "yellow" existed on a relative basis. (Blue is "minus yellow," and yellow is "minus blue").
The human visual system does all this automatically, so that you can percieve accurate color under all types of changing lighting conditions.